Kansas City Wheat futures plummeted Wednesday (limit-down 85¢ in the front two contracts) on apparently more positive ceasefire talks between Ukraine and Russia. Corn and Soybean futures went along for the ride.
Corn futures closed mostly 14¢ to 28¢ lower.
Soybean futures closed mostly 6¢ to 9¢ lower.
That helped Feeder Cattle futures close an average of 37¢ higher (2¢ to 90¢ higher) except for 2¢ lower in May and 20¢ lower in the back contract.
Live Cattle futures closed an average of 69¢ lower (10¢ lower toward the back to $1.50 lower in spot Apr), except for unchanged in the back contract.
Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Country chatter suggested some early bids at steady money.
Live prices last week were at $138/cwt. in the Southern Plains and Nebraska and at $138-$140 in the western Corn Belt. Dressed prices were $220 in Nebraska and $219-$222 in the western Corn Belt.
Choice Boxed beef cutout value was 18¢ higher Wednesday afternoon at $258.08/cwt. Select was $1.43 higher at $250.27.
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Major U.S. financial indices closed sharply higher again Wednesday, amid a volatile session as investors reacted to the Fed’s decision to raise interest rates for the first time in about three years. Although the increase was widely anticipated, intimation the Fed will continue raising interest rates to nearly 2% (1.9% median projection) by the end of the year caught some off guard.
For now, the Federal Open Market Committee decided to raise the target range for the federal funds rate to 0.25% to 0.50% and expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.
The Dow Jones Industrial Average closed 518 points higher. The S&P 500 closed 95 points higher. The NASDAQ was up 487 points.
West Texas Intermediate Crude Oil futures on the CME closed $1.20 to $1.40 lower in the front six contracts.
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USDA’s Economic Research Service revised the expected average feeder steer price for this year slightly lower to $160.50/cwt., in the latest monthly Livestock, Dairy and Poultry Outlook. The price is basis steers weighing 750-800 lbs. selling at Oklahoma City.
“The first-quarter forecast was lowered $2 from last month to $156/cwt., but the second-quarter forecast was raised by $1 to $159 on tightening feeder cattle supplies and higher forecast fed cattle prices,” ERS analysts say. “However, due to higher anticipated feed prices in the second half of 2022, the feeder steer forecasts for the third and fourth quarters were reduced by $1 to $161 and $166, respectively.”
ERS analysts note first-quarter feedlot placements are expected to be less year over year, although deteriorating pasture conditions and wheat prices could encourage more rapid placements than projected.
“Fed cattle marketings are expected to be slightly higher in the second half of 2022 than the previous month’s forecast, reflecting a larger number of placements in the first quarter as well as higher feed prices likely encouraging feedlot operators to be as current as possible in cattle marketings,” say ERS analysts.