Apparent resolve by cattle feeders to ignore early, steady-money negotiated cash fed cattle bids helped underpin the slightly higher close in Cattle futures.
Feeder Cattle futures closed an average of 32¢ higher, except for 35¢ lower in Jan
Live Cattle futures closed an average of 39¢ higher, except for unchanged in the back contract.
Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Wednesday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.
Prices last week were at $132/cwt. on a live basis in the Northern Plains, the Southern Plains and Colorado. They were $131-$132 in the western Corn Belt. Dressed prices were at $207.
Choice boxed beef cutout value was $3.66 lower Wednesday afternoon at $278.47/cwt. Select was $2.53 lower at $264.06/cwt.
Grain futures strengthened on news ranging from reduced ethanol tariffs in South America to speculation about China buying interest in 2022.
Corn futures closed 5¢ higher through the front four contracts and then mostly 2¢ to 3¢ higher.
Soybean futures closed 19¢ to 25¢ higher through the front six contracts, 11¢ to 17¢ higher through the middle of the board and then 3¢ higher.
Major U.S. financial indices closed lower Wednesday, as investor concern about inflation appeared to be the main driver.
The Dow Jones Industrial Average closed 211 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 52 points.
Early 10-year baseline projections (2022 to 2031) from USDA’s Economic Research Service suggest livestock prices, except hogs, will increase over the next decade, while U.S. crop prices will decline.
“Beef cattle and broiler prices are expected to demonstrate a modest increase in the early years of the projection period before leveling off to slower growth, resulting in an average price increase of 8% to 17% over the decade,” according to ERS analysts.
The projected five-area direct fed steer price is forecast to increase steadily from $121.06/cwt. this year and $128.75 next year to $142.55 by 2031.
Feeder steer prices (basis Oklahoma City) are projected to grow from this year’s average of $144.80/cwt. to $155.50 next year and $171.19 in 2023. From there, the price increases to $181.41 by 2031.
That’s with the beef cow herd projected to be 30.56 million head in 2022, declining to 30.53 million in 2023 and then expanding steadily to 31.46 million head in 2031.
During the same period, season-average corn prices received by producers are projected to decline from $4.80/bu. in 2022-23 to $4.00 by 2026-27. ERS pegs the season-average corn price this year (2021-22) at $5.45.
“Expected declines for crops follow a period of generally higher prices that have peaked during the current marketing year,” say ERS analysts. “The price-bolstering effects of economic recovery, renewed export demand, and logistical problems in supply chains are forecast to subside after the recent peak during the 2021-22 marketing year, and crop prices are forecast subsequently to return to the earlier pattern of generally lower prices through 2031.”