Grain futures marched higher Thursday, buoyed by the latest monthly World Agricultural Supply and Demand Estimates (see below), led by Kansas City Wheat, which closed 63¢ to 69¢ higher in the front five contracts.
Corn futures closed mostly 8¢ to 16¢ higher, while Soybean futures closed 3¢ to 10¢ higher through Aug ‘23 and then mostly unchanged to 4¢ lower.
Cattle futures stepped lower beneath the weight of the outlook for continued higher feed prices.
Feeder Cattle futures closed an average of $2.88 lower ($1.27 to $3.50 lower). Live Cattle futures closed an average of $1.30 lower (50¢ lower at the back to $2.07 lower toward the front).
Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.
So far this week, live prices are steady in the Southern Plains at $140/cwt., $2 lower in Nebraska at $144 and steady to $2 lower in the western Corn Belt at $144-$145. Dressed prices are $2 lower in Nebraska at $232 and $2-$3 lower in the western Corn Belt at $227-$230. Live prices in Colorado last week were at $142-$148.
Choice Boxed beef cutout value was $2.12 higher Thursday afternoon at $257.20/cwt. Select was $2.18 higher at $244.36.
******************************
Major U.S. financial indices continued to waver Thursday, with inflation worries and concerns about economic growth.
The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 6 points.
******************************
USDA’s Economic Research Service (ERS) increased both forecast beef production and fed steer prices slightly for this year, in the latest monthly World Agricultural Supply and Demand Estimates.
ERS increased the annual average five-area direct fed steer priced for this year by 60¢ to $140.10/cwt. That was based on current prices and expectations of tighter supplies in the second half of this year. Average prices are projected at $140 in the second quarter, $136 in the third quarter and $145 in the fourth quarter.
The average annual price next year is forecast to be $153, lifted by tighter supplies.
ERS increased expected beef production slightly for this year, compared to the previous month, to 27.84 billion lbs. That would be 106 million lbs. less than last year (-0.4%).
“Beef production is raised, with more cattle placed in feedlots sooner than normally expected due to drought conditions, supporting higher annual fed cattle slaughter,” say ERS analysts. “Additionally, cow slaughter is forecast higher.”
Beef production next year is forecast at 25.95 billion lbs., which would be 1.89 billion lbs. less (-6.8%) compared to this year.
Total red meat and poultry production this year is projected to be 106.38 billion lbs., slightly more than the previous month’s estimate. The total would be 431 million lbs. less than last year (-0.4%). Total red meat and poultry production next year is forecast to be 105.34 billion lbs., which would be 1.04 billion lbs. less than this year (-0.97%) less than this year.
Turning to crops, ERS analysts emphasize, “Russia’s recent military invasion of Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The May WASDE represents an ongoing assessment of the short-term impacts as a result of this action.”
Corn
The 2022-23 U.S. corn outlook is for lower production, domestic use, exports, ending stocks, and higher prices.
The season-average corn price received by producers is projected at $6.75/bu., up 85¢ from a year ago. If realized, it would be the highest average price since $6.89 in 2012-13.
Soybeans
The 2022-23 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks compared with 2021-22.
The 2022-23 U.S. season-average soybean price is forecast at $14.40/bu., compared with $13.25 in 2021-22. Soybean meal prices are forecast down $20 per short ton from 2021-22 to $400/short ton and soybean oil prices are forecast down 5¢ to average 70¢/lb., as oilseed and product supplies rebound in foreign markets.
Wheat
The outlook for 2022-23 U.S. wheat is for reduced supplies, exports, domestic use stocks, and higher prices.
The projected 2022-23 season-average farm price is a record high $10.75/bu., up $3.05 from last year’s revised price.