Cattle futures drifted lower Tuesday with traders apparently waiting for further cash direction.
Live Cattle futures closed narrowly mixed, from an average of 27¢ lower in four contracts to an average of 14¢ higher.
Feeder Cattle futures closed an average of 60¢ lower.
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, prices were at $128-$130/cwt. in the Southern Plains and the western Corn Belt; $130 in Nebraska. Dressed prices were $202-$204.
Early on, bets seem to favor steady to higher prices this week.
Choice boxed beef cutout value was 85¢ lower Monday afternoon at $287.80/cwt. Select was $2.02 higher at $270.62/cwt.
Grain futures, especially Soybeans firmed Tuesday with friendlier projections than expected in the monthly World Agricultural Supply and Demand Estimates (see below).
Corn futures closed mostly 3¢ higher.
Soybean futures closed mostly 19¢ to 23¢ higher.
Major U.S. financial indices closed lower Tuesday, with seemingly more attention paid to inflation indicators.
The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 95 points.
USDA’s Economic Research Service (ERS) increased the projected annual five-area direct average steer price for this year by $1.25 to $121.31/cwt., in the latest World Agricultural Supply and Demand Estimates (WASDE), based on continued firm demand.
That’s with beef production this year projected to be 53 million lbs. more than the previous month to 27.88 billion lbs. on higher expected slaughter of fed cattle and heavier carcass weights.
The annual average price for next year was forecast $1 higher at $130.
Beef production next year was estimated to be 885 million lbs. less than this year (-3.17%).
Projected average steer prices were projected at $128 in the fourth quarter this year.
Next year, the five are direct average steer price was forecast at $132 in the first quarter, $129 in the second quarter and at $127 in the third quarter.
ERS projected total red meat and poultry production this year 171 million lbs. more than the previous month at 106.73 billion lbs. Total red meat and poultry production next year was forecast to be 463 million lbs. less than this year (-0.43%) at 106.27 billion lbs.
Corn production was forecast 43 million bu. more than the previous month to 15.06 billion bu., with average yield forecast 0.5 bu./acre more at 177.0bu./acre. Corn used for ethanol production was increased 50 million bu. With use rising slightly more than supply, corn ending stocks were lowered 7 million bu.
The season-average corn price received by producers was unchanged at $5.45/bu.
ERS lowered projected soybean production by 23 million bu. to 4.42 billion bu., but they also reduced expected exports. With use falling more than supply, soybean ending stocks were raised 20 million bu.
The U.S. season-average soybean price for 2020-21 was forecast 25¢ lower to $12.10/bu. Projected soybean meal and oil prices were unchanged at $325.00 per short ton and 65.0¢/lb., respectively.
The forecast for 2021-22 U.S. wheat was for lower supplies, higher domestic use, reduced exports, and slightly higher ending stocks, compared to the previous month.
Supplies were reduced 10 million bu. on lower anticipated imports. Total domestic use was projected 2 million bushels higher. Exports were lowered 15 million bu. Projected 2021-22 ending stocks were raised 3 million bu. to 583 million, which would leave the lowest U.S. ending stocks since 2007-08.
The projected 2021-22 season-average farm price for wheat was raised 20¢ to $6.90/bu.