Live Cattle futures and Feeder Cattle ran in opposite directions Tuesday as Corn futures strengthened on the monthly World Agricultural Supply and Demand Estimates (see below).
Live Cattle futures closed an average of 67¢ higher (40¢ to $1.02 higher).
Feeder Cattle futures closed an average of 68¢ lower (10¢ lower at the back to $1.70 lower in spot Aug).
Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 73¢ higher Tuesday afternoon at $222.39/cwt. Select was 54¢ lower at $208.25.
Corn futures closed 10¢ to 12¢ higher through May ‘20 and then mostly 4¢ to 6¢ higher.
Soybean futures closed 1¢ to 3¢ higher.
Major U.S. financial indices edged lower Tuesday.
The Dow Jones Industrial Average closed 14 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed fractionally lower.
Analysts with USDA’s Economic Research Service (ERS) reduced estimated beef production for this year by 65 million lbs. to 27.20 billion lbs., in the latest World Agricultural Supply and Demand Estimates (WASDE).
“The decline in beef production largely reflects lower steer and heifer slaughter in the second half of the year…as incentives to add weight on pasture slows the pace of feedlot placements,” say ERS analysts.
If realized, estimated total production would still be 332 million lbs. more than last year.
Estimated fed steer price for the year (5-area Direct) was lowered $1.50 from the previous month to $117/cwt. Prices are forecast to average $118 in the second quarter, $110 in the third quarter and $114 in the fourth.
Despite an increase to projected beginning corn stocks, based on reduced exports, WASDE estimates ending stocks 810 million bu. lower to 1.7 billion bu.—the lowest since 2013-14—with lower production.
“Corn production for 2019-20 is forecast to decline 1.4 billion bu. to 13.7 billion, which if realized would be the lowest since 2015-16,” say ERS analysts. “Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects. USDA will release its Acreage report June 28, which will provide survey-based indications of planted and harvested area.” USDA slashed expected yield per acre by 10 bu. to 166 bu./acre, compared to the prior month’s estimate. That would be 6.4 bu. less than the projection for 2018-19. USDA reduced projections for planted corn acreage by 3 million acres to 89.8 million acres.
The season-average farm price for corn was raised 50¢ to $3.80/bu.
WASDE increased beginning soybean stocks on reduced exports.
“Although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season,” explain ERS analysts.
The 2019-20 season-average price for soybeans is forecast at $8.25/bu., up 15¢ reflecting the impact of higher corn prices. Soybean meal prices are forecast at $295 per short ton, up $5. The soybean oil price forecast is unchanged at 29.5¢/lb.
WASDE projects U.S. 2019-20 wheat supplies lower, with reduced beginning stocks partly offset by slightly higher production.
U.S. beginning wheat stocks were estimated to be 25 million bu. less based on increased 2018-19 exports. Ending stocks were lowered 69 million bu. to 1,072 million.
“Winter wheat production is forecast up 6 million bu. to 1,274 million with an increase to Hard Red Winter more than offsetting decreases for Soft Red Winter and White Winter,” say ERS analysts. “Total wheat production is forecast at 1,903 million bu., up 5.8 million bu. from the May forecast.”
The season-average farm price for wheat was raised 40¢/bu. to $5.10, reflecting sharply higher Wheat futures prices and reduced 2019-20 corn supplies.