Live Cattle firmed, closing narrowly mixed, from an average of 38¢ lower to an average of 14¢ higher. However, contra-seasonally lackluster wholesale beef prices and the dwindling premium in deferred contracts continued to cast a gloomy pall.
Feeder Cattle futures closed an average of 76¢ lower (52¢ to $1.72 lower) amid extremely light trade.
Corn futures closed mixed, mostly 4¢ lower to 2¢ higher.
Soybean futures closed mostly 12¢ to 15¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive on very 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 $2 lower in the Southern Plains at $138, $2-$4 lower in Nebraska at $140-$142 and $2-$3 lower in the western Corn Belt at $142. Dressed prices are $4 lower in Nebraska at $226.
Last week, live prices were $140-$144 in Colorado. Dressed prices were $227-$230 in the western Corn Belt.
Choice Boxed beef cutout value was $1.23 higher Thursday afternoon at $261.70/cwt. Select was 4¢ lower at $246.06.
Net U.S. beef export sales of 23,300 metric tons for the week ending May 12 were 18% less than the previous week but 35% more than the previous four-week average, according to the U.S. Export Sales report. Increases were primarily for Japan, South Korea, China, Taiwan, and Canada.
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Major U.S. financial indices softened further Thursday with more news of major retailers struggling with earnings.
The Dow Jones Industrial Average closed 236 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 29 points.
West Texas Intermediate Crude Oil futures on the CME closed $2.30 to $2.85 higher through the front six contracts.
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“Drought conditions and higher operating costs have encouraged the rapid culling of beef cows in first-quarter 2022 to levels not seen in decades,” say analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “Also, based on USDA Agricultural Marketing Service reports for actual weekly slaughter under federal inspection, April 2022 showed the highest number of beef cows slaughtered for the month since 1996. There were over 5 million more beef cows on January 1 of 1996 than January 1 of this year. Subsequently, the outlook weakens for the potential calf crops in 2022 and 2023, further reducing potential cattle placements year over year in late 2022 and early 2023.”
According to ERS, the pastureland condition index at the beginning of this year’s grazing season was the lowest since the series began in 1995, reflecting two years of drought.
“As more calves are placed in feedlots sooner than normally expected due to drought conditions, marketings in 2022 are pulled forward into the second and third quarters, partially offsetting an expected decline in marketings in late 2022,” say ERS analysts.
However, these analysts note the expected increase in cow and bull slaughter more than offsets the net decline in fed cattle marketings this year. ERS projects beef production at 27.8 billion lbs. this year and 6.8% less next year at 26.0 billion lbs. That would be the least production since 2016.