Profit taking appeared to the order of the day in Cattle futures on Thursday, despite positive weekly beef exports.
Net 2023 U.S. beef export sales of 28,100 metric tons (MT) the week ending Feb. 9 were 72% more than the previous week and 34% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report. Increases were primarily for Japan, South Korea, China, Mexico, and Hong Kong.
Live Cattle futures closed an average of 40¢ lower, except for 22¢ higher in spot Feb.
Feeder Cattle futures closed an average of 60¢ lower (40¢ to $1.10 lower).
Negotiated cash fed cattle trade ranged from slow on light demand to mostly inactive on very light demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were a few live trades reported in Nebraska at $160/cwt.
So far this week, live prices are steady to $2 higher at $159-$160 in Nebraska and $160-$162 in the western Corn Belt. Dressed prices in both regions last week were $254.
In the Southern Plains last week, live prices were $160 in the Texas Panhandle and $160-$161 in Kansas.
Choice boxed beef cutout value was $3.88 higher Thursday afternoon at $279.55/cwt. Select was $1.45 higher at $262.64/cwt.
Corn futures closed mostly fractionally lower to 1¢ lower.
KC HRW Wheat closed mostly 3¢ to 4¢ higher.
Soybean futures closed mostly 4¢ to 8¢ higher.
Major U.S. financial indices closed lower Thursday with another gauge of higher inflation than expected.
The Producer Price Index for final demand increased 0.7% in January, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. On an unadjusted basis, the index for final demand rose 6.0% for the 12 months ended January 2023. That was more than expected.
As well, initial weekly unemployment insurance claims came in less than expected at 194,000.
The Dow Jones Industrial Average closed 431 points lower. The S&P 500 closed 57 points lower. The NASDAQ was down 214 points.
West Texas Intermediate Crude Oil futures (CME) closed 9¢ to 17¢ lower through the front six contracts.
USDA Agricultural Projections to 2032, released Wednesday, suggest some relief in feed costs.
“Corn prices are expected to fall steadily from a near-record peak of $6.80 per bushel in 2022/23 to $5.70 per bushel in the first year of the projection period,” according to USDA analysts. “Corn continues a downward trend through 2026/27 before leveling off at $4.30 per bushel through the remainder of the projection period.”
Similarly, USDA forecasts soybean prices to fall to $13.00 per bushel in the first year of the projection period, which would be $1 less than the 2022-2023 peak. Soybean prices continue to decline through the first half of the projection period and level at $10.30 per bushel during the second half.
“Wheat prices are expected to drop from a record $9.20 per bushel in 2022/23 to $8.00 in the first year of the projection period, still the second highest price on record,” USDA analysts say. “Prices continue to fall through 2026/27 before settling at $5.70 per bushel through 2032/33.”
In terms of global economic growth, USDA projects global real GDP growth to decrease in the short term due to higher price inflation and resulting tighter monetary policy. Global real GDP growth is projected to average 2.8% annually during the projection period.
“During the projection period, U.S. real GDP growth is projected at an annual average of 1.8%,” say USDA analysts. “The positive average projected for 2023–2032 continues beyond the initial recovery from COVID-19 but is lower due to the uncertainties ahead. The expected trend is for there to be lower long-term growth rates in the United States compared to previous decades.”