Grain and soybean futures rallied Thursday with extreme heat and dry conditions forecast for the Corn Belt.
Corn futures closed 11¢ to 14¢ higher through Jly ‘23, and then mostly 3¢ to 5¢ higher.
Soybean futures closed mostly 14¢ to 19¢ higher.
Stouter corn prices helped pressure Feeder Cattle futures an average of $1.66 lower.
Live Cattle futures mostly held their ground, supported by stronger cash prices, closing an average of 30¢ lower, except for unchanged to an average of 13¢ higher in three contracts.
Negotiated cash fed cattle trade was slow on light demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service. Live sales were $3 higher than last week in Kansas at $140 and $2-$4 higher than Tuesday in the Texas Panhandle at $140.
Elsewhere, for the week, live prices are $2-$4 higher in the Northern Plains at $145 and $3 higher in the western Corn Belt at $144-$146. Dressed prices are $4-$5 higher at $230.
Choice Boxed beef cutout value was $1.06 lower through Thursday afternoon at $267.16/cwt. Select was 30¢ lower at $267.16.
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Major U.S. financial indices closed sharply lower Thursday on more data indicating slowing economic growth.
Privately owned housing starts in May of 1.55 million were 14.4% less than the revised April estimate, according to the U.S. Census Bureau. That was significantly more bearish than the trade expected and 3.5% less year over year.
The Dow Jones Industrial Average closed 741 points lower. The S&P 500 closed 123 points lower. The NASDAQ was down 453 points.
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USDA’s Economic Research Service (ERS) lowered the expected average feeder steer price for the second quarter $2 to $157/cwt., based on recent price data. In the latest Livestock, Dairy and Poultry Outlook, ERS forecast the average feeder steer price (basis 750-800 lbs., Oklahoma City) at $166 in the third quarter, and $170 in the fourth quarter for an annual average price of $162.76. Next year, the first-quarter price is projected at $170 and the annual average price is forecast to be $198.25.
As for fed steers, ERS analysts note the weekly five-area average price peaked the first part of May at $143.42. Although prices declined since then, they explain the weekly average price of $138.07 for the week ending June 5 was $18 higher year over year.
“A generally faster pace of slaughter from packers may keep fed steer prices relatively stable for the remainder of the second quarter,” ERS analysts say. “Based on the May 2022 average monthly price of $141.34/cwt. and current daily price data, the 2022 fed steer price is forecast unchanged at $140.10. The 2023 fed steer price is also unchanged from last month at $153.00.”
ERS also left forecast beef production for this year unchanged.
“However, current poor forage conditions and high operating costs continue to push producers’ beef cow culling rates up, and calves are being placed on feed at a faster-than-expected pace,” say ERS analysts. “Higher anticipated cow slaughter and higher expected second-half 2022 fed cattle marketings more than offset lower expected carcass weights, resulting in a marginal increase in 2022 production to 27.9 billion pounds.”
ERS projects next year’s beef production to be 7% less.