Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales in Nebraska at $159/cwt. and a few in the western Corn Belt at $162. Elsewhere, trade was at a standstill.
Live prices last week were $160/cwt. in the Texas Panhandle, $160-$161 in Kansas, $157-$160 in Nebraska and $160 in the western Corn Belt. Dressed prices were $254.
Choice boxed beef cutout value was $3.61 higher Wednesday afternoon at $275.67/cwt. Select was $2.41 higher at $261.19/cwt.
Weaker Corn futures helped Feeder Cattle futures gain marginally, closing an average of 36¢ higher.
Live Cattle futures continued sideways, closing narrowly mixed, from an average of 6¢ lower to an average of 7¢ higher,
Grain and Soybean futures weakened Wednesday with pressure including positive harvest weather in South America.
Corn futures closed 2¢ to 6¢ lower through Jly ‘24 and then mostly unchanged to fractionally lower.
KC HRW Wheat closed 9¢ to 12¢ lower.
Soybean futures closed mostly 4¢ to 8¢ lower.
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Major U.S. financial indices closed higher Wednesday, buoyed by strong retail sales.
Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were up 3.0% from the previous month, and up 6.4% year over year, according to the U.S. Census Bureau.
The Dow Jones Industrial Average closed 38 points higher. The S&P 500 closed 11 points higher. The NASDAQ was up 110 points.
West Texas Intermediate Crude Oil futures (CME) closed 33¢ to 47¢ lower through the front six contracts.
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USDA Agricultural Projections to 2032, released Wednesday, suggest cattle prices will peak this year in the near term.
USDA projects Feeder steer prices (750-800 lbs., Oklahoma City) to peak this year at $200.75/cwt., then decline to $174.53 in 2026. Forecast prices increase for the remainder of the projection period to $191.32 in 2032.
Projected fed steer prices (five-area direct weighted average) follow a similar pattern with a peak this year at $153.50, declining to $137.82 in 2026 and then increasing gradually to $148.73 in 2032.
“As producers respond to higher cattle prices, U.S. cattle inventories are expected to expand in 2025, and cattle prices are projected to decline through 2026,” USDA analysts explain. “For the remainder of the period, steer prices are expected to gradually rise reflecting strong global demand for U.S. beef and relatively tight supplies for the domestic market.”
That’s with the estimated beef cow inventory reaching the low point in 2024 at 28.7 million head and then growing gradually to 31.3 million head in 2032. The total cow inventory is forecast to ebb at 38.1 million head in 2023 and then grow gradually to 40.8 million head in 2032.
Beef production is expected to decline this year and next, reflecting tighter cattle supplies.
“Higher cattle prices in 2023 will likely incentivize heifer retention, after which modest herd growth is expected through the end of the projection period,” USDA analysts say. “Increasing slaughter weights will further support production gains as the herd expands. Beef production is expected to increase during the projection period, starting in 2025 at year-over-year rates that average almost 1.0%.”