Cash fed cattle trade on Thursday was mainly steady with the previous week on moderate demand and trade. Live prices were at mostly $126-$127/cwt. with dressed trade at mostly $204.
Despite positive fundamentals and the oversold nature of the market, bears continued to drive Cattle futures lower on Thursday, helped along by technical selling.
Live Cattle futures closed an average of $1.04 lower (65¢ to $1.55 lower).
Feeder Cattle futures closed an average of $2.21 lower ($2.02 lower to $2.42 lower).
Choice boxed beef cutout value was 31¢ higher in the afternoon at $223.88/cwt. Select was $1.58 higher at $216.78.
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Major U.S. financial indices closed higher on Thursday. Presumably, the boost was tied to President Trump implementing the 25% tariff on imported steel and 10% tariff on imported aluminum, but excluding key trade partners Canada and Mexico.
The Dow Jones Industrial Average closed 93 points higher. The S&P 500 closed 12 points higher. The NASDAQ closed 31 points higher.
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Analysts with USDA’s Economic Research Service (ERS) project total red meat and poultry production this year fractionally lower than last month, in the latest World Agricultural Supply and Demand Estimates (WASDE).
Beef production was estimated to be 27.69 billion lbs., which is 40 million lbs. less than the previous month’s projection. That’s based on lower first-quarter slaughter and lower weights. However, ERS analysts say the decline is offset somewhat by higher second-quarter fed beef production and higher non-fed beef production during the first half of the year.
With that in mind, projected fed steer prices for the first-quarter are projected slightly higher at $124-$127/cwt. Projected quarterly prices for the remainder of the year: second quarter at $118-$124; third quarter at $110-$120; fourth quarter at $112-$122.
Other WASDE Estimates
ERS reduced expected ending corn stocks by 225 million bu. on expectations for increased exports and usage for ethanol. The projected range for the season-average corn price received by producers was narrowed 10¢ on the low end to $3.15 to $3.55/bu., with the midpoint up 5¢ to $3.35.
U.S. soybean supply and use changes for 2017-18 included higher crush, lower exports, and increased ending stocks. The season-average soybean price range forecast of $9.00 to $9.60/bu. was unchanged at the midpoint. Soybean oil prices are forecast at 30¢ to 33¢/lb., down 1¢ at the midpoint. Soybean meal prices are projected at $325 to $355/short ton, up $20 at the midpoint. Higher soybean meal prices reflect the impact of sharply lower soybean production in Argentina, ERS analysts say.
Despite a projected reduction in exports of 25 million bu., the season-average farm price for wheat increased 5¢ at the midpoint of the range to $4.65 per bushel based on expectations of higher prices for the remainder of the year.