Cattle futures softened Thursday with the lack of direction in weekly cash fed cattle prices and perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.
Feeder Cattle futures closed an average of 82¢ lower (2¢ lower toward the back to $1.40 lower near the front), except for 35¢ higher in the back contract.
Live Cattle futures closed an average of 75¢ lower.
Corn futures continued to soften — mostly 4¢ to 5¢ lower — with the wetter outlook for Argentina.
Soybean futures closed 8¢ to 10¢ lower through Jan ‘24. And then mostly 2¢ to 5¢ lower.
Negotiated cash fed cattle trade was limited on light demand through Thursday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. There were some early live trades in Kansas at $155/cwt., as well as some early dressed sales at $248-$249 in Nebraska and $248 in the western Corn Belt.
Last week were $156/cwt. on a live basis in the Southern Plains, $156-$157 in Nebraska and $158 in the western Corn Belt. Dressed prices were $250-$252.
Choice boxed beef cutout value was $2.57 lower Thursday afternoon at $271.51/cwt. Select was $1.83 higher at $255.69/cwt.
Major U.S. financial indices continued lower Thursday as investors fretted over the Fed maintaining its hawkish stance on interest rates, despite recent signs of easing inflation. Strong employment reflected in weekly initial jobless claims added to their angst. The advance figure for seasonally adjusted initial unemployment insurance claims for the week ending Jan. 14 was 190,000, which was 15,000 fewer than the previous week.
The Dow Jones Industrial Average closed 252 points lower. The S&P 500 closed 30 points lower. The NASDAQ was down 104 points.
West Texas Intermediate Crude Oil futures (CME) closed 81¢ to 85¢ higher through the front six contracts.
USDA’s Economic Research Service (ERS) increased projected feeder steer prices (750-800 lbs., Oklahoma City) for the first two quarters of the year, based on more November feedlot placements than expected, and tighter anticipated supplies available for placement early this year.
In the monthly Livestock Dairy and Poultry Outlook, ERS increased the projected first-quarter price by $5 to $182/cwt. and the second-quarter price by $2 to $192. Projected prices are $214 in the third quarter and $224 in the fourth quarter for an annual average of $203.
ERS also increased projected 2023 beef production 170 million lbs. to 26.4 billion lbs. based on the temporal shift in fed cattle marketings and an outlook for higher cow slaughter.
“The anticipated cow slaughter outlook for 2023 was raised on early January slaughter data and persistent poor forage conditions,” ERS analysts say. “Lighter carcass weights in fourth-quarter 2022 are carried over into early 2023. As a result, the increase in expected marketings and cow slaughter in 2023 more than offset lighter anticipated weights.”
Estimated beef production this year would be 1.8 billion lbs. less (-6.6%) than last year’s projected total.
As reported in Cattle Current last week, ERS projected the annual average five-area direct fed steer price for this year at $158.50/cwt., in the January World Agricultural Supply and Demand Estimates. That was $2.50 more than the previous month’s estimate, based on expected demand strength. By quarter and compared to the previous month, ERS increased projected prices by $4 to $157 in the first quarter, by $3 to $157 in the second quarter and by $2 to $157 in the third quarter.