Through Friday afternoon, negotiated cash fed cattle prices for the week were generally $2 higher in the Southern Plains at $109/cwt. on a live basis; $1-$2 higher in Nebraska and at $108-$109 and steady to $3 higher in the western Corn Belt at $107-$110. Dressed trade was $2-$3 higher at $170.
Through Thursday, the five-area direct negotiated weighted average fed steer price was $107.59/cwt. on a live basis, which was 48¢ higher than the previous week, but $1.49 less than the same time last year. The average price in the beef of $169.29 was $1.61 more than the prior week but 79¢ less than the previous year.
Live Cattle futures closed an average of 55¢ lower except for 17¢ higher in spot Oct.
Feeder Cattle futures closed an average of 90¢ lower (5¢ to $1.22 lower), except for 20¢ higher in spot Oct.
Choice boxed beef cutout value was $1.94 lower Friday afternoon at $214.06/cwt. Select was $3.28 lower at $199.82.
Total estimated cattle slaughter for the week ending Oct. 10 was 637,000 head, which was 28,000 head fewer (-4.2%) than the previous week and 1.7% less than the same time last year. That’s according to USDA’s Estimated Weekly Meat Production Under Federal Inspection report. Year to date total cattle slaughter 24.81 million head is 1.05 million head fewer (-4.1%) than the same time last year.
Estimated beef production was 535.3 million lbs., which was 4.1% less than the previous week, but a tick higher than the same week last year. Year-to-date beef production of 20.57 billion lbs. is 1.4% less than last year.
Corn and soybean futures found another gear Friday, fueled by the monthly World Agricultural Supply and Demand Estimates (see below).
Corn futures closed mostly 6¢ to 8¢ higher through Jly ’21 and then mostly 3¢ to 4¢ higher.
Soybean futures closed mostly 15¢ and 26¢ higher.
Major U.S. financial indices posted another day of gains Friday, with continued optimism regarding additional federal economic stimulus.
The Dow Jones Industrial Average closed 161 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 158 points.
USDA’s Economic Research Service (ERS) increased projected fed cattle prices for this year and next, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). Specifically, ERS increased the 2020 annual average price (five-area direct) by $1.41 to $108.71/cwt., compared to the previous month, with a fourth-quarter price projection of $109. That’s based on current price strength and robust beef demand.
The forecast annual average fed steer price for 2021 increased by $2 to $114. Prices are projected to be $113 in the first quarter, $110 in the second quarter and $114 in the third quarter.
That’s with a projected increase in beef production both this year and next.
ERS projects beef production for this year at 27.14 billion lbs., which was 90 million lbs. more than the previous month’s estimate. That’s based on expectations for increased slaughter in the second half of the year. The total would be 17 million lbs. less than last year. Projections for beef production in 2021 increased 10 million lbs. to 27.37 billion lbs., which would be 227 million lbs. more than this year.
Estimated total red meat and poultry production this year of 106.39 billion lbs. would be 1.13 billion lbs. more than last year. ERS projects total red meat and poultry production next year at 107.46 billion lbs.
Apparently, feed prices will be less supportive to cattle markets than previously thought, according to from USDA’s Economic Research Service (ERS).
Corn production is forecast 178 million bu. less than the previous month at 14.72 billion bu., based on reduced harvested area and a slight decline in yield to 178.4 bu./acre. Corn supplies are forecast down sharply from last month, on a smaller crop and lower beginning stocks. Corn ending stocks for 2020-21 were lowered 336 million bu. The season average corn price received by producers was increased 10¢ to $3.60/bu.
Soybean production is projected at 4.3 billion bu., down 45 million on lower harvested area. Soybean yield is projected at 51.9 bu./acre, unchanged from the September forecast. Soybean supplies for 2020-21 are forecast 96 million bu. less at 4.8 billion bu. on lower production and beginning stocks. Despite reduced supplies, soybean exports were raised 75 million bu. on record early-season sales. With smaller supplies and increased exports, ending stocks are projected at 290 million bu., down 170 million from last month.
The U.S. season-average soybean price for 2020-21 is forecast at $9.80/bu., up 55¢. The soybean meal price is forecast at $335.00/short ton, up $20.00. The soybean oil price forecast is raised 0.5¢ to 32.5¢/lb.
The 2020-21 U.S. wheat supply and demand outlook was unchanged. The projected season-average farm price for wheat was unchanged at $4.50/bu.