Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service, with too few transactions to trend. Elsewhere, trade was at a standstill.
Feeder Cattle futures closed sharply lower Tuesday, pressured by more friendly World Agricultural Supply and Demand Estimates for corn and soybeans (see below). Firmer wholesale beef values and hopes for a recovering domestic economy later in the year helped Live Cattle close mainly higher. The recent and continued increase in open interest helped, as did strength in Lean Hog futures.
Live Cattle futures closed an average of 89¢ higher, except for 55¢ lower in the front three contracts.
Feeder Cattle futures closed an average of $1.98 lower from 90¢ lower at the back to $2.92 lower toward the front.
Choice boxed beef cutout value was $1.45 higher Tuesday afternoon at $209.14/cwt. Select was $2.35 higher at $198.09.
Grain futures surged higher Tuesday, fueled by the friendly World Agricultural Supply and Demand Estimates (see below).
Corn futures closed 23¢ to 25¢ higher through the front four contracts, 12¢ to 16¢ higher through the next four and then mostly 5¢ higher.
Soybean futures closed 41¢ to 47¢ higher through the front four contracts, 19¢ to 33¢ higher through the next four and then mostly 10¢ to 16¢ lower.
Major U.S. financial indices edged higher Tuesday, with trader expectations for additional economic stimulus apparently trumping escalating COVID-19 cases.
The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 36 points.
USDA lowered its forecast for total red meat and poultry production for 2021, compared to the previous month’s estimate, according to the latest World Agricultural Supply and Demand Estimates (WASDE). That’s based on expectations of lower beef, broiler, and turkey production more than offsetting higher pork production.
However, total estimated red meat and poultry production for 2021 is forecast 634 million lbs. more than in 2020 (+0.60%) at 107.10 billion lbs.
Beef production for 2021 is forecast at 27.19 billion lbs., which would be 32 million lbs. more (+0.11%) than in 2020, with higher non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights.
WASDE estimated the average five-area direct fed steer price for last year at $108.51/cwt. Fed steer prices for 2021 are projected to be $113 in the first and second quarters, $115 in the third quarter and $120 in the fourth quarter for an annual average of $115.50, which was 50¢ more than the previous month’s forecast.
Among other WASDE highlights:
Corn: Outlook for the 2020-21 U.S. corn crop is for lower production, reduced corn used for ethanol, smaller feed and residual use and exports, and decreased ending stocks. Corn production is estimated at 14.182 billion bu., down 324 million on a lower yield and slight reduction in harvested area. With supply falling more than use, corn stocks were lowered 150 million bu. to 1.552 billion. The season-average corn price received by producers was raised 20¢ to $4.20/bu.
Soybeans: Soybean production was estimated at 4.135 billion bu., down 35 million bu., led by reductions for Minnesota, Iowa, and Kansas. Harvested area was estimated at 82.3 million acres, up slightly from the previous report. Yield was estimated at 50.2 bu./acre, down 0.5 bu. With higher imports and slightly higher beginning stocks, soybean supplies were down 14 million bu. from last month. The soybean crush forecast was raised 5 million bu. to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina. The soybean export forecast was raised 30 million to a record 2.23 billion bu. With lower supplies and increased use, ending stocks were projected at 140 million bu., down 35 million from the previous forecast.
The U.S. season-average soybean price for 2020-21 was projected 60¢ higher at $11.15/bu. The soybean meal price was projected $20 higher at $390/short ton. The soybean oil price was forecast 2.5¢ higher at 38.5¢/lb.
Wheat: Outlook for 2020-21 U.S. wheat is for slightly smaller supplies, unchanged domestic use, higher exports, and lower ending stocks. Supplies were reduced on lower imports, which were decreased 5 million bu. to 120 million on a slower than expected pace. Exports were raised 10 million bu. to 985 million as higher white wheat exports were partially offset by lower Hard Red Winter (HRW) exports. Projected 2020-21 ending stocks were reduced 15 million bu. to 862 million, down 16% from last year. The season-average farm price for wheat was unchanged at $4.70/bu.
Winter wheat: Planted area for harvest in 2021 was estimated at 32.0 million acres, up 5% from 2020 and up 2% from 2019, according to the Winter Wheat and Canola Seedings report. This represents the fourth lowest United States acreage on record. Seeding of the 2021 acreage was underway in early-September and was ahead of the five-year average pace. Throughout the season, planting and emergence progress remained ahead of the five-year average pace. Seeding was mostly complete by Nov. 15.
Hay Stocks: Stocks on farms Dec. 1 were 84.02 million tons, according to the latest USDA Crop Production report. That was 468,000 tons less (-0.55%) than the previous year.