Stronger cash prices, the early-week, bullish Cattle report, the performance-depressing widespread winter storm and improved packer production helped Cattle futures take another step higher Wednesday.
Feeder Cattle futures closed an average of $2.17 higher ($1.55 to $3.175 higher).
Live Cattle futures closed an average of $1.14 higher (83¢ to $1.65 higher).
Negotiated cash fed cattle trade in Nebraska and the Western Corn Belt was moderate through Wednesday afternoon, according to the Agricultural Marketing Service. In Nebraska, live sales traded $3-$4 higher at $140/cwt. and dressed sales traded $4 higher at $222. In the Western Corn Belt, live sales traded $3 higher at $140-$141 and dressed prices were $4 higher at $222.
Trade in the Southern Plains was mostly inactive on light demand. Last week, live sales were $137 in the Texas Panhandle and $136 in Kansas.
Choice Boxed beef cutout value was $2.29 lower Wednesday afternoon at $283.15/cwt. Select was 65¢ lower at $279.57
Corn futures closed mostly down 2¢ to 12¢.
Soybean futures closed 1¢ to 16¢ higher through March ’23, then down 2¢ to 9¢.
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Follow-through support carried Major U.S. financial indices higher again on Wednesday.
The Dow Jones Industrial Average closed 224 points higher. The S&P 500 closed 71 points higher. The NASDAQ was up 42 points.
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CattleFax provided a strongly optimistic cattle price forecast during its Outlook Seminar in Houston Wednesday.
With cattle numbers declining, front-end fed cattle marketing approaching pre-civid levels and beef demand continuing strong, CattleFax projects the average fed steer price this year $18 higher year-over-year at $140/cwt. with a range of $130-$155. The organization forecasts the average feeder steer price (800 lbs.) at $172 with a range of $158-$184, and the average calf price (550 lbs.) at $205 with a range of $180-$230.
Moreover, CattleFax forecasts utility cows at an average of $75/cwt. with a range of $65 to $85. Bred cows are expected to bring an average $1,850/head with a range of $1,700 to $2,000 for load lots of quality, running-age cows.
The feeder cattle and calf supply will be 675,000 head fewer than last year, totaling 25.5 million head, according to CattleFax. Fed cattle slaughter will decline 400,000 head to 25.7 million head. Commercial beef production will contract over the next several years starting with a 2% decline in 2022.
Kevin Good, vice president of industry relations and analysis at CattleFax, pointed out U.S. beef cow inventories fell more than 700,000 head from last year and are nearly 1.6 million less than the cyclical peak. This year, the beef cow herd will be near 30.1 million head.
“Drought, market volatility and processing capacity challenges affected 30-40% of the cow herd over the last year. Without an improvement in weather and profitability, at least 250,000 more head will be liquidated in 2022,” Good says.