Cattle futures edged lower Thursday, amid light trade and likely positioning ahead of the holiday weekend — the CME is closed Friday in observance of Good Friday.
Live Cattle futures closed an average of 18¢ lower, except for 5¢ higher in the spot month and unchanged in Dec.
Feeder Cattle futures closed an average of 26¢ lower.
Corn futures closed 1¢ to 6¢ higher in the front three contracts and then fractionally lower to 3¢ higher.
Soybean futures closed mixed, mostly 4¢ lower to 1¢ higher, except for 6¢ higher and fractionally higher in the front two contracts.
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
So far this week, live prices are $1 higher in the Southern Plains at $139/cwt., $2 higher in Nebraska at $140-$142, $3 higher in the western Corn Belt at $143 (a few up too $145) and $2-$4 higher in Colorado at $140-$142.
Dressed prices are $4 higher at $226; a few up to $231.
Choice Boxed beef cutout value was 50¢ lower Thursday afternoon at $271.86/cwt. Select was 34¢ lower at $259.71.
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Major U.S. financial indices closed lower Thursday, led by tech stocks, amid rising Treasury yield rates and fretting over steep inflation.
The Dow Jones Industrial Average closed 113 points lower. The S&P 500 closed 54 points lower. The NASDAQ was down 292 points
West Texas Intermediate Crude Oil futures (CME) closed $1.65 to $2.70 higher through the front six contracts.
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USDA’s Economic Research Service (ERS) increased the anticipated annual feeder steer price this year to $163/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook.
“With higher placements in the first quarter, it is likely that calves that might have remained on pastures later in the year were pulled forward. As a result, from last month, tighter anticipated feeder cattle supplies in second-half 2022 will likely support elevated prices,” say ERS analysts.
The projected third-quarter average feeder steer price (basis 750-800 lbs. Oklahoma City) was raised $4 to $165; the fourth-quarter price was bumped $6 higher to $172.
Based on elevated beef cow slaughter, it appears calf numbers will be less than previously thought going forward. Through the first quarter of this year, weekly, federally inspected (FI) beef cow slaughter averaged 18% higher year over year, while dairy cow slaughter declined 3%.
“Typically, cow slaughter would display this volume in the fourth quarter. However, higher feed costs, drought conditions plaguing much of the nation, and historically high prices for cull cows have cow-calf producers making further cuts to their herds,” say ERS analysts. “The macroeconomic situation has also changed from last year with higher fuel prices, feed costs, and operating costs that may be affecting producer decisions as well.”
Total FI non-fed cattle slaughter in the first quarter was the most since the mid-1980s.
ERS analysts point out 69% of the country was experiencing some level of drought the week of March 29, compared with about 63% the same week last year. That’s the widest drought coverage since about 67% in April 2013.
Spun another way, ERS analysts say 61% of the nation’s cattle inventory is in areas experiencing drought, compared to 35% at the same time last year.
“Based on the economic and environmental factors noted, expectations for cow and bull slaughter were raised in each quarter of 2022,” say ERS analysts. “Despite the highest cow slaughter volume typically occurring at the end of the year, the volume in fourth-quarter 2022 will likely not surpass the first quarter. The 2022 price forecast for live cutter cows was raised to $79/cwt. This is 22% above the 2021 average of $64.91 and the highest price since 2015.”