Maybe Cattle futures finally found a bottom to the recent selloff as short covering and positioning helped spur a rally late Friday.
Other than 50¢ higher in spot Jun, Live Cattle futures closed an average of $1.87 higher.
Feeder Cattle futures closed an average of $2.45 higher.
Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.36 lower Friday afternoon at $221.11/cwt. Select was 38¢ higher at $207.46.
Apparently, much of the bearish news in the monthly World Agricultural Supply and Demand Estimates (see below) was already priced into the market, given the muted reaction in futures markets.
Other than 1¢ to 2¢ lower in the front three contracts, Corn futures closed mostly 1¢ to 2¢ higher.
Soybean futures closed 1¢ to 3¢ lower through May ’20 and then mostly 1¢ higher.
So much for fundamentals; chatter about on-again, off-again trade talks with China continued to whipsaw equity markets Friday, to the upside this time. Major U.S. financial indices closed higher on reports that talks with China were constructive.
The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 6 points.
Although cash fed cattle prices continue to soften, analysts with USDA’s Economic Research Service project slightly higher prices year over year— $118.50/cwt.—compared to $117.12 last year. In the latest World Agricultural Supply and Demand Estimates (WASDE), prices are forecast at $121 in the second quarter, $113 in the third quarter and $114 in the fourth quarter.
That’s with an estimated 27.27 billion lbs. of beef production, which would be 397 million lbs. more than last year.
Estimates for grain prices were significantly less bullish.
ERS projects the 2019-20 season-average farm price for corn 20¢ lower at $3.30/bu., the lowest since 2006-07.
Even with current planting wonderments, ERS forecasts this year’s corn crop at 15.0 billion bu. (yield of 176.0 bu./acre), which would be the second largest on record. Ending corn stocks for 2019-20 are projected to be 390 million bu. more than last year, with a stocks-to-use ratio of 16.9%, which would be the highest since 2005-06.
WASDE projects the 2019-20 U.S. season-average soybean price at $8.10/bu., down 45¢ from the previous year. Soybean meal prices are projected $15 less than the previous year at $290/short ton. Soybean oil prices are projected 1.5¢ higher at 29.5¢/lb.
“With sharply higher beginning stocks, soybean supplies are projected at 5,165 million bu., up 3% from 2018-19,” say ERS analysts.
“The projected season-average farm price for wheat is $4.70/bu., down from last year’s estimated $5.20 on the expectation of greater export competition and lower U.S. corn prices.”