Negotiated cash fed cattle prices continued to bounce higher Wednesday, with live prices mostly $4 higher on a live basis in the Southern Plains at $104/cwt. So far this week, live prices are $2 higher in the western Corn Belt at $105, where dressed trade is $2-$7 higher at $165-$170. In Nebraska, dressed trade is $2 higher at $165.
Cattle feeders offered 890 head—all from the Southern Plains—in the weekly Fed Cattle Exchange auction. Of those, 348 head sold for 1-9 day delivery at a weighted average price of $104.50/cwt. Another 254 head sold for delivery at 1-17 days for a weighted average price of $104.27.
Cash optimism helped lift Cattle futures Wednesday.
Live Cattle futures closed an average of 84¢ higher (15¢ higher at the back to $1.70 higher in spot Aug), except for 5¢ lower in the back contract.
Feeder Cattle futures closed an average of 81¢ higher (17¢ higher at the back to $1.47 higher toward the front).
Choice boxed beef cutout value was $1.01 higher Wednesday afternoon at $209.09/cwt. Select was 97¢ higher at $195.99.
Despite higher estimated yield and production in the monthly World Agricultural Supply and Demand Estimates (see below) forecast ending stocks, lower than expected, boosted Corn futures, while recent Chinese buying helped Soybean futures.
Corn futures closed 3¢ higher through Jly ’21 and then mostly 1¢ higher.
Soybean futures closed 8¢ to 12¢ higher through Jan ’21 and then mostly 5¢-7¢ higher.
Major U.S. financial indices closed higher on Wednesday, led by tech stocks.
The Dow Jones Industrial Average closed 289 points higher. The S&P 500 closed 46 points higher. The NASDAQ closed 229 points higher.
USDA’s Economic Research Service (ERS), in the monthly World Agricultural Supply and Demand Estimates (WASDE) increased the expected annual fed steer price for this year 50¢ from the previous month’s projection to $107.30/cwt. Forecast prices are $101 in the third quarter, $104 in the fourth quarter and $105 in the first two quarters next year.
Beef production for this year is forecast at 27.03 billion lbs. That’s 94 million lbs. more than the previous month’s forecast, based on the faster pace of steer and heifer slaughter. Beef production for next year was projected at 27.62 billion lbs., which was 100 million lbs. less than the previous month, as forecast slaughter in the second half of 2021 will reflect lower expected placements in the first half of the year.
Forecast total red meat and poultry production for this year was projected 59 million lbs. less than the previous month at 106.48 billion lbs., as decreases in pork production more than offset higher beef and poultry production. Total red meat and poultry production for 2021 was unchanged at 107.99 billion lbs., which would be 1.5 billion lbs. more than this year.
Among other WASDE highlights:
Corn production for this year was forecast 278 million bu. more than the previous month at 15.3 billion bu., with the season’s first survey-based yield forecast at a record 181.8 bu./acre. With the outlook for larger supplies, greater feed and residual use, increased exports, and higher ending stocks, the season-average corn price received by producers was lowered 25¢ to $3.10/bu.
As for soybeans, U.S. supply and use changes for 2020-21 include lower beginning stocks and higher production, crush, exports, and ending stocks. Soybean production was forecast at 4.425 billion bu., up 290 million bu. on higher forecast yields of 53.3 bu./acre, which would be 5.9 bu. more than last year.
The U.S. season-average soybean price for 2020-21 was forecast at $8.35/bu., down 15¢ from last month. The soybean meal price was forecast at $290 per short ton, down $10. The soybean oil price was forecast at 30.0¢/lb., up 1¢.
The outlook for 2020-21 U.S. wheat is for increased production offset by lower imports, higher exports, and lower ending stocks. Projected U.S. wheat production was raised 14 million bu. to 1,838 million with increased Hard Red Spring (HRS) and Durum production more than offsetting lower winter wheat production.
With offsetting supply changes and increased use, ending stocks were lowered 17 million bu. to 925 million. If realized, these would be the lowest wheat ending stocks in six years. However, the season-average farm wheat price was decreased 10¢ per bushel to $4.50, on lower U.S. corn prices and reduced wheat price expectations for the remainder of the market year.