Cattle futures drifted lower again Wednesday awaiting cash direction.
Feeder Cattle futures closed an average of 62¢ lower.
Live Cattle futures closed an average of 14¢ lower, except for an average of 16¢ higher in the front two contracts.
Negotiated cash fed cattle trade was limited on light demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $157/cwt. Elsewhere, trade ranged from mostly inactive on very light demand to a standstill.
Last week, live prices were $158/cwt. in the Texas Panhandle, $158-$159 in Kansas, $155-$159 in Nebraska and $154-$160 in the western Corn Belt. Dressed prices were $250.
Choice boxed beef cutout value was 48¢ higher Wednesday afternoon at $267.20/cwt. Select was $4.17 lower at $253.16/cwt.
Corn futures closed mostly 1¢ to 2¢ higher.
KC HRW Wheat closed mostly 6¢ to 9¢ higher.
Soybean futures closed fractionally higher to 4¢ higher through Nov ’23 and then mostly unchanged to 5¢ lower.
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Major U.S. financial indices closed lower Wednesday as investors seemed to grow skittish about the strong U.S. dollar and potential velocity of interest rates.
The Dow Jones Industrial Average closed 207 points lower. The S&P 500 closed 46 points lower. The NASDAQ was down 203 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.20 to $1.33 higher through the front six contracts.
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USDA’s Economic Research Service (ERS) increased the expected annual five-area direct fed steer price for this year to $159/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE). Prices were forecast to be $158 in the first quarter, $159 in the second quarter, $157 in the third quarter and $162 in the fourth quarter.
Prices were raised on expected strength in first-half demand for fed cattle in the face of tightening feedlot numbers.
ERS increased projected beef production for this year by 50 million pounds to 26.49 billion pounds. That would be 1.8 billion pounds less (-6.3%) than last year’s projected total.
“Slaughter is raised for the first quarter but is partly offset by lower carcass weights as cow slaughter is larger than previously forecast,” ERS analysts explain. “For the second quarter, steer and heifer slaughter is lowered as fourth-quarter 2022 placements were lower than expected, implying fewer animals available for marketing in the second quarter. Lower fed cattle slaughter, coupled with lower average carcass weights, more than offsets higher expected cow slaughter.”
Among other WASDE highlights…
Corn
The outlook for 2022/23 U.S. corn was for 25 million bushels more ending stocks resulting from less corn used for ethanol.
The season-average corn price received by producers was unchanged at $6.70 per bushel
Wheat
The supply and demand outlook for 2022/23 U.S. wheat was for 1 million bushels more ending stocks.
The 2022/23 season-average farm price was forecast 10¢ per bushel lower at $9.00, based on prices received to date and expectations for cash prices for the remainder of 2022/23.
Soybeans
The 2022/23 U.S. soybean outlook was for 15 million bushels more ending stocks.
The U.S. season-average soybean price for 2022/23 was forecast at $14.30 per bushel, up 10¢ from last month. The soybean meal price was forecast at $450.00 per short ton, up $25. The soybean oil price forecast was unchanged at 68.0¢ per pound.