Corn futures surged mostly 9¢ to 13¢ higher Friday, fueled by significantly lower yield estimates by the Pro Farmer Tour, compared to USDA’s most recent forecast. Soybean futures closed mostly 20¢ to 30¢ higher.
Resurgent Corn futures pressured Feeder Cattle an average of $1.63 lower, except for 67¢ higher in the newly minted back contract.
Generally softer cash trade pressured Live Cattle futures an average of 55¢ lower.
Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service. There were a few live trades in the western Corn Belt at $147/cwt., but too few to trend.
For the week, live prices were steady to $1 higher in the Southern Plains at $142/cwt., generally steady to $1 lower in Nebraska at $145-$148 and $2 lower in the western Corn Belt at $146-$148. Dressed prices in Nebraska were $1-$2 lower at $232-$233. Dressed prices in the western Corn Belt the previous week were $234.
Through Thursday, the five-area direct average fed steer price was $2.22 lower on a live basis at $144.54. The average steer price in the beef was $1.15 lower at $232.88.
Choice Boxed beef cutout value was 78¢ lower Friday afternoon at $262.76/cwt. Select was $1.22 higher at $238.76/cwt.
Total estimated cattle slaughter last week was 17,000 head more than the previous week at 678,000 head. Year-to-date estimated total cattle slaughter of 22.1 million head was 262,000 head more (+1.2%) than the same time last year. Estimated year-to-date beef production of 18.2 billion lbs. was 175.3 million lbs. more (+0.97%) than the prior year.
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Major U.S. financial indices plunged Friday, apparently in reaction to hawkish comments from Federal Reserve Chair Jerome Powell, regarding further interest rate hikes.
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance,” Powell explained at the closely watched economic policy symposium in Jackson Hole, WY. “Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
The Dow Jones Industrial Average closed 1,008 points lower. The S&P 500 closed 141 points lower. The NASDAQ was down 497 points.
West Texas Intermediate Crude Oil futures on the CME closed mixed, from 34¢ lower to 54¢ higher through the front six contracts.
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Total pounds of beef in freezers July 31 were 1% less than the previous month but 27% more year over year, according to USDA’s latest Cold Storage report. The 510.8 million lbs. of beef in cold storage were record high for the date.
“To put this in perspective, this is less than one week of federally inspected beef production,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the quantity of beef in cold storage in July 2022 exceeded the previous July’s quantity by 110 million lbs., and the quantity of beef in cold storage this year has not experienced its typical second-quarter decline. This simply means the marketplace started the second half of the year with more beef in cold storage than is typical and that quantity is expected to continue increasing through the fourth quarter of the year.”
If heifer and cow slaughter remain elevated, Griffith explains beef in cold storage could exceed 600 million lbs. by the end of the year. “This is not necessarily a bad thing as beef supplies will begin to tighten the second half of 2023,” Griffith says.
Frozen pork supplies were 2% less than the prior month but 20% higher year over year.
Total red meat supplies in freezers were 1% less than the previous month but 23% more than the same time last year.
Total poultry supplies on cold storage were 5% more than the previous month and 6% more than the prior year.