Negotiated cash fed cattle trade continued at a listless pace Thursday. Although too few transactions to trend, there were some live trades in Nebraska at $123-$126/cwt. and at $198 in the beef, compared to $125 and $198, respectively, last week. Elsewhere, trade was inactive to limited.
Feeder Cattle futures started Thursday’s session strong, retreated in the face of higher Corn futures — in the wake of the monthly World Agricultural Supply and Demand Estimates (WASDE) — and then mostly firmed by the end of the session.
Feeder Cattle futures closed mixed, from an average of 14¢ lower to an average of 38¢ higher.
Surging wholesale beef prices helped lift Live Cattle futures, but sluggish cash trade limited the potential. Choice boxed beef cutout value was $7.13 higher Thursday afternoon at $317.93/cwt. Select was $2.32 higher at $290.31/cwt.
Live Cattle futures closed an average of 64¢ higher.
The average dressed steer weight the week ending July 31 was 3 lbs. lighter than the previous week at 891 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 2 lbs. lighter at 814 lbs.
Corn futures gained on the WASDE report, amid volatile intra-day trading. They closed 9¢ to 14¢ higher through new-crop contracts and then mostly 1¢ to 3¢ higher.
Soybean futures closed mixed, mostly 3¢ lower to 2¢ higher.
Major U.S. financial indices closed higher on Thursday, supported by the third consecutive decline in weekly initial unemployment insurance claims.
The Dow Jones Industrial Average closed 15 points higher. The S&P 500 closed 13 points higher. The NASDAQ closed 51 points higher.
USDA’s Economic Research Service (ERS) increased the projected annual average five-area direct fed steer price this year by $2 to $121.20/cwt., based on current price strength and firm demand. The estimated annual price for next year increased by $4 to $126.
That’s in the latest World Agricultural Supply and Demand Estimates (WASDE)
More specifically, the average fed steer price was projected at $124 in the third quarter, $127 in the fourth quarter and $131 in the first quarter of next year.
Some of that bullishness is based on lower expected beef production this year and next.
Total beef production this year was projected at 27.87 billion lbs., which was 33 million lbs. less than the prior month. It would be 698 million lbs. more (+2.57%) than last year. ERS analysts say the decline is mostly due to lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year.
Total estimated beef production next year of 26.96 billion lbs. was 360 million lbs. less (-1.31%) than the previous month and would be 907 million lbs. less (-3.25%) than this year’s estimate. That’s based on tighter expected supplies of both fed and non-fed cattle.
Lower expected beef production pushed total anticipated red meat and poultry production lower.
Projected total red meat and poultry production this year of 106.82 billion lbs. was 315 million lbs. less (-0.29%) than the previous month. That would be 265 million lbs. more (+0.25%) than last year.
ERS reduced forecast corn production for 2021-22 by 415 million bu. to 14.8 billion bu., based on projected yield of 174.6 bu./acre, which was 4.9 bu. less than the previous month’s estimate.Ending stocks were projected 190 million bu. lower at 1.2 billion.
The season-average corn price received by producers was raised 15¢ to $5.75/bu.
ERS reduced estimated soybean production for 2021-22 by 66 million bu. to 4.34 billion bu., based on lower projected yield. But, beginning stock estimates increased based on decreased expectations for crush and exports.
The U.S. season-average soybean price for 2021-22 was forecast at $13.70/bu., unchanged from last month. The soybean meal price was forecast at $385 per short ton, down $10. The soybean oil price forecast was unchanged at 65.0¢/lb.
ERS reduced estimated wheat production for 2021-22 by 49 million bu. to 1,697 million bu., based on yield of 44.5 bu./acre, which was 1.3 bu. less than the previous forecast. Projected 2021-22 ending stocks were reduced 38 million bu. to 627 million, which would be 26% less than last year.
The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.70.