Cattle futures fell hard Thursday. The driving force appeared to be continuation of what began with the bearish Cattle on Feed report last month (lots more placements than anticipated) and the expectation of another negative report this month, tied to the realization supplies will be higher than thought in the shorter term. Likewise, the monthly World Agricultural Supply and Demand Estimates (see below) published on Thursday confirmed expectations of more beef production than previously anticipated.
Feeder Cattle futures closed an average of $7.28 lower ($5.50 to $7.87 lower).
Live Cattle futures closed an average of $4.11 lower ($3.25 to $5.05 lower).
Negotiated cash fed cattle trade was slow on light to moderate demand in all major cattle feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.
In light tests, FOB live prices were mostly $4 lower in the Texas Panhandle at $181/cwt. and mostly $5 lower in Kansas at $180.
Dressed delivered prices in Nebraska were mostly $5 lower at $287. Although too few to trend, there were a few FOB live trades at $181.50, compared to last week’s $185.
There were too few transactions to trend in the western Corn Belt, but there were some FOB live sales at $180 and some in the beef at $283-$287. Prices there last week were $185 and $292, respectively.
Choice boxed beef cutout value was 67¢ higher Thursday afternoon at $299.42/cwt. Select was $1.61 lower at $269.42/cwt.
Soybean and grain futures closed lower, pressured by the World Agricultural Supply and Demand Estimates.
Corn futures closed mostly 5¢ to 8¢ lower.
KC HRW Wheat closed 5¢ to 7¢ lower.
Soybean futures closed 12¢ to 22¢ lower through Sep ’24 and then 8¢ to 10¢ lower.
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Major U.S. financial indices closed lower Thursday on rising bond yields.
The Dow Jones Industrial Average closed 220 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 128 points.
West Texas Intermediate Crude Oil futures (CME) closed 41¢ to 45¢ higher through the front six contracts.
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USDA’s Economic Research Service (ERS) lowered forecast beef production for this year slightly in the latest World Agricultural Supply and Demand Estimates (WASDE). That stemmed from reduced steer and heifer slaughter offsetting higher expected cow slaughter and higher average dressed weights in the fourth quarter. However, ERS increased forecast beef production for next year by 535 million pounds (+2.1%) compared to the previous month at 25.8 billion pounds. That was based on more expected steer and heifer placements — ultimate marketings — for the remainder of this year and the first part of 2024.
Even so, the forecast weighted annual average five-area direct fed steer price was unchanged for this year at $177.30/cwt. and next year at $185. Prices are forecast at $185 in the first quarter next year, $184 in the second and $182 in the third quarter.