The weighted average five-area direct fed steer price through Thursday was $95.97/cwt. on a live basis and $157.67 in the beef. That was $1.06 and $3.84 higher, week to week, respectively.
Speculation by some that that the low is in for cash fed cattle price, along with normalizing wholesale beef values, helped support Cattle futures to end the week. Lower Corn futures on Friday also supported Feeder Cattle.
Live Cattle futures closed an average of 76¢ higher.
Feeder Cattle futures closed an average of $1.24 higher.
Choice boxed beef cutout value was 91¢ higher Friday afternoon at $204.50/cwt. Select was 54¢ lower at $194.29.
Increased beginning corn and soybean stocks projected in the monthly World Agricultural Supply and Demand Estimates (see below) weighed on futures Friday.
Corn futures closed mostly 10¢ to 11¢ lower through Jul ’21 and then mostly 6¢ lower.
Soybean futures closed 9¢ to 12¢ lower.
Major U.S. financial indices closed higher Friday, with much of the overall support attributed to promising results for a coronavirus treatment.
The Dow Jones Industrial Average closed 369 points higher. The S&P 500 closed 32 points higher. The NASDAQ closed 69 points higher.
USDA’s monthly World Agricultural Supply and Demand Estimates increased expectations for 2020 beef production and total red meat and poultry production.
Beef production for this year was projected at 26.93 billion lbs., which was 260 million lbs. more (+0.97%) than the previous month’s estimate, based on higher cattle slaughter and heavier carcass weights. The total would be 221 million lbs. less (-0.81%) than in 2019.
“Cattle price forecasts for 2020 are lowered from last month on prices to date and continued large supplies of fed cattle,” according to analysts with USDA’s Economic Research Service (ERS).
ERS projects the five-area direct weighted average steer price at $100/cwt. in the third quarter and at $103 in the fourth quarter for an annual average price of $106.80. That’s $1.80 less than the June projection. The projected annual price next year is $110, with prices estimated at $104 in the first quarter and $105 in the second.
ERS estimates total red meat and poultry production for this year at 106.54 billion lbs., which is 1.54 billion lbs. more (+1.46%) than the previous month’s estimate. That would be 1.28 billion lbs. more (+1.21%) than last year.
Among other WASDE highlights:
USDA estimated corn production for this year at 15.0 billion bu., which was 995 million bu. less (-6.22%) than the previous month’s estimate, given 5 million fewer planted acres projected in June’s Acreage report.
Corn production, with projected yield of 178.5 bu./acre, would be 1.38 billion bu. more than last year (+10.16%). Beginning corn stocks were projected 145 million bu. higher, based on lower estimated use forecast for 2019-20.
However, with 2020-2021 supply declining more than use, the forecast season-average corn price received by producers was raised 15¢ to $3.35/bu.
Soybean production is projected at 4.14 billion bu., up 10 million on increased harvested area (83.0 million acres) in the June 30 Acreage report. The soybean yield forecast was unchanged at 49.8 bu./acre. With higher beginning stocks, 2020-21 soybean supplies were raised 45 million bu.
The U.S. season-average soybean price for 2020-21 is forecast at $8.50/bu., up 30¢, partly reflecting higher price expectations following the June Acreage report. The soybean meal price is projected at $300/short ton, up $10 from the previous month. The soybean oil price forecast is unchanged at 29.0¢/lb.
The outlook for 2020-21 U.S. wheat is for larger supplies, lower domestic use, unchanged exports, and increased stocks. Supplies were raised, with larger beginning stocks more than offset by lower production.
Ending wheat stocks for 2020-21 were projected 17 million bu. higher than the previous month at 942 million. The projected season-average farm wheat price (SAFP) was unchanged at $4.60/bu., compared to the revised 2019-20 SAFP of $4.58.