Negotiated cash fed cattle trade on Wednesday continued steady with the previous day in the Southern Plains at $106/cwt. That’s $2 higher than last week.
Cattle futures drifted mostly higher, with continued support from the positive cash outlook and climbing wholesale beef values.
Live Cattle futures closed an average of 50¢ higher, except for an average of 19¢ lower in two contracts.Feeder Cattle futures closed mixed but mostly higher, from an average of 37¢ higher across the front five contracts, to an average of 22¢ lower.
The monthly Cattle on Feed report is due out Friday. Early estimates run about even for year over year marketings in July and the Aug. 1 on-feed inventory, with expectations for July placements to be up about 6%.
Choice boxed beef cutout value was $2.18 higher Wednesday afternoon to $223.04/cwt. Select was $1.00 higher at $205.65.
Corn futures closed mostly 1¢ lower.
Soybean futures closed fractionally mixed through Mar ‘22, and then 1¢ to 3¢ lower.
Major U.S. financial indices closed lower on Wednesday.
Pressure included the somber economic outlook in the Federal Open Markets Committee minutes from late July and published Wednesday. According to the minutes, participants noted, “…the path of the economy would depend significantly on the course of the virus and that the on-going public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and posed considerable risks to the economic outlook over the medium term.”
Further, “The staff still judged that a more pessimistic projection was no less plausible than the baseline forecast. In this alternative scenario, an acceleration of the coronavirus outbreak, with another round of strict limitations on social interactions and business operations, was assumed to begin later this year, leading to a decrease in real GDP, a jump in the unemployment rate, and renewed downward pressure on inflation next year. Compared with the baseline, the disruption to economic activity was more severe and protracted in this scenario, with real GDP and inflation lower and the unemployment rate higher by the end of the medium-term projection.”
The Dow Jones Industrial Average closed 85 points lower. The S&P 500 closed 14 points lower. The NASDAQ closed 64 points lower.
Domestic beef demand recovered significantly in June from pandemic disruptions, according to the most recent domestic demand indexes maintained by Kansas State University.
The Choice retail beef demand index was 98.87 in June, which was 34.85% more than the previous month and 29.23% more than the previous year. The all fresh retail beef demand index was 40.98% higher month to month and 34.22% more than the previous year.
By way of comparison, the retail pork demand index was 84% higher than previous month and 18% more year over year. The retail chicken demand index was 12.7% more than in May and 9.7% more than in 2019.