The volatile market whipsaw unleashed by Russia’s attack on Ukraine continued in futures and equities Friday.
Grain and soybean futures closed sharply lower, shoved around by massive open interest, a more positive South American weather outlook and USDA projecting more corn and wheat acres to be planted than expected. In its Grains and Oil Seeds Outlook presented at the annual Agricultural Outlook Forum, USDA forecast 92.0 million acres of corn and 88.0 million acres of soybeans.
Soybean futures closed 34¢ to 71¢ lower through Jan ‘23 and the mostly 19¢ to 29¢ lower.
Corn futures closed 24¢ to 35¢ lower through Jly ‘23 and then mostly 20¢ lower.
Softer Corn futures benefitted Feeder Cattle futures, which closed an average of 96¢ higher (65¢ to $1.15 higher) Friday. However, they closed an average of $3.74 lower week to week on Friday ($2.22 to $6.10 lower).
Based on weekly auctions monitored by Cattle Current, calves and feeders sold widely mixed last week but with distinctly lower undertones related to pressure from grain prices as well as weather disruptions in some areas.
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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.
For the week, live prices were generally steady in the Southern Plains at mostly $142, $2 higher in Nebraska at $144 and steady to $3 higher in the western Corn Belt at $144-$145. Dressed prices were $1 higher in Nebraska at $227 and steady to $1 higher in the western Corn Belt at $226-$227.
The five-area direct weighted average steer price was $1.15 higher on a live basis at $143.40/cwt. and 92¢ higher in the beef at $227.02.
Total estimated cattle slaughter of 647,000 head was 13,000 head fewer than the previous week. Total estimated year-to-date cattle slaughter of 5.14 million head was just 19,000 head fewer than a year earlier.
Live Cattle futures closed an average 33¢ lower Friday (15¢ lower toward the back to $1.25 lower in spot Feb), except for 55¢ higher in the back contract. Week to week on Friday, they were an average of $2.64 lower ($1.30 to $3.97 lower).
Wholesale beef price continue their seasonal decline.
Choice boxed beef cutout value was $7.58 lower week to week on Friday at $258.27/cwt. Select was $7.22 lower at $255.41.
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Major U.S. financial indices closed higher Friday with follow-through support from the momentum that reversed the steep decline during the previous day’s session. Part of that seemed to extend from oversold conditions.
The Down Jones Industrial Average closed 834 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 221 points.
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Logic suggests markets should view Friday’s monthly Cattle on Feed report as neutral with numbers close to pre-report expectations.
Placements in January (feedlots with 1,000 head or more capacity) were 1.999 million, which was 25,000 less (-1.2%) than the previous year.
In terms of placement weights, 43.3% went on feed weighing 699 lbs. or less, 48.0% weighing 700-899 lbs. and 8.8% weighing 900 lbs. or more.
Marketings in January of 1.773 million were 56,000 head less (-3.1%) than a year earlier.
Cattle on feed Feb. 1 of 12.199 million were 93,000 head more (+0.8%) year over year. That’s the most for the data since the date series began in 1996.
The February report also provides perspective on how many cattle were on feed Jan. 1 in feedlots with less than 1,000 head capacity, and how many cattle those feedlots marketed last year.
Cattle and calves on feed in feedlots with 1,000 head or more capacity Jan. 1 represented 81.9% of all cattle and calves on feed in the United States. It was 81.6% a year earlier.
Marketings of fed cattle for feedlots with capacity of 1,000 head or more during 2021 represented 87.2% of total cattle marketed from all feedlots in the United States, compared to 87.0% in 2020.