Cattle futures moved solidly lower Tuesday after early follow-through support. The surge higher in corn prices helped Live Cattle eke out a mostly positive close but kept pressure on Feeder Cattle. Keep in mind that trade was light in both pits.
Except for 12¢ lower and 25¢ lower on either end of the board, Live Cattle futures closed an average of 26¢ higher.
Except for unchanged in the back two contracts, Feeder Cattle futures closed an average of 57¢ lower (15¢ to 82¢ lower).
Boxed beef cutout values were steady to firm on light to moderate demand and light offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 21¢ lower in the afternoon at $224.92/cwt. Select was 59¢ higher at $203.39.
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Major U.S. financial indices closed mostly narrowly mixed Tuesday, with the NASDAQ receiving a boost from a U.S. District Court ruling in favor of the proposed merger between Time Warner and AT&T.
The Dow Jones Industrial Average closed 1 point lower. The S&P 500 closed 4 points higher. The NASDAQ was up 43 points.
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Projected beef production for this year was lowered by 90 million lbs. in the most recent World Agricultural Supply and Demand Estimates (WASDE), on lower carcass weights more than offsetting increased steer, heifer and cow slaughter in the second quarter. Estimated beef production for this year is 27.125 billion lbs. Estimated beef production next year is 27.175 billion lbs.
The average 5-area Direct fed steer price is projected at $116-$119/cwt. for the second quarter, $106-$112 for the third quarter and $108-$116 for the fourth quarter. The annual price was reduced $1 on the upper end of the range to $114-$118; the projection for 2019 is $113-$122.
WASDE projects ending corn stocks 105 million bu. lower to 1.577 billion bu. If realized, that would be the lowest level since 2013-14. The season-average farm price for corn was raised 10¢ at the midpoint with a range of $3.40 to $4.40/bu.
Projected ending stocks for wheat are 9 million bu. lower than the previous month to 946 million bu. The projected season-average farm price for wheat is up 10¢/bu. with the midpoint at $5.10/bu., compared to the revised 2017-18 price of $4.75.
Soybean ending stocks were projected 25 million bu. less for 2017-18 and 30 million bu. less for 2018-19, but the price forecast was unchanged. The 2018-19 season-average price for soybeans is forecast at $8.75 to $11.25/bu. Soybean meal prices are projected at $330 to $370/short ton. Soybean oil prices are projected at 29.5¢ to 33.5¢/lb.