Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon. There were too few transactions to trend, according to the Agricultural Marketing Service.
Live prices last week were at $124/cwt. in the Southern Plains, $122-$124 in Nebraska and $122 in the western Corn Belt. Dressed prices were $196 in Nebraska and $193-$196 in the western Corn Belt.
Cattle futures were a mixed bag Tuesday with Live Cattle, especially the front months, pressured by increased beef production estimates in the latest World Agricultural Supply and Demand Estimates (WASDE).
Live Cattle futures closed an average of 42¢ lower (5¢ lower at the back to 92¢ lower toward the front).
On the other hand, Feeder Cattle futures closed an average of 45¢ higher except for 75¢ lower in spot Oct. Support included higher corn production and corn price stability suggested by the latest WASDE. More on those estimates momentarily.
Choice boxed beef cutout value was 5¢ lower Tuesday afternoon at $281.07/cwt. Select was $2.29 lower at $261.35.
Wheat futures gained Tuesday but Corn and especially Soybean futures softened in the wake of the latest World Agricultural Supply and Demand Estimates (see below).
Corn futures closed mostly 5¢ to 10¢ lower.
Soybean futures closed 20¢ to 30¢ lower through Jan ’23 and then 12¢ to 17¢ lower.
K.C. Wheat futures were mostly 3¢ to 5¢ higher.
Major U.S. financial indices coasted lower Tuesday as investors awaited the monthly Consumer Price Index and minutes from the last Federal Reserve meeting, both due to be published Wednesday.
The Dow Jones Industrial Average closed 117 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 20 points.
USDA’s Economic research Service (ERS) lowered fed cattle price projections for 2021 on current prices and relatively large supplies, in the latest monthly World Agricultural Supply and Demand Estimates (WASDE).
The annual five-area direct fed steer price average this year was projected $1.14 lower than the previous month at $121.06/cwt. with average prices at $123.51 in the third quarter and $127.00 in the fourth quarter.
However, ERS increased the 2022 price forecast on tighter expected supplies. The annual five-area direct average fed steer price next year was forecast $1.00 higher than the previous month at $129.00 with average prices at $130.00 in the first quarter and $128.00 in the second quarter.
ERS projected beef production this year 90 million lbs. more than the previous month’s estimate at 27.83 billion lbs., which would be 658 million lbs. more than last year (+2.4%). ERS forecasts next year’s beef production at 26.99 billion lbs., which would be 837 million lbs. less than this year (-3.0%).
Total estimated red meat and poultry production this year of 106.56 billion lbs. would be just 5 million lbs. more than last year. Projected total red meat and polity production next year of 106.25 billion lbs. would be 306 million lbs. less than this year’s estimate (-0.29%).
ERS projected 2021-22 U.S. corn production 23 million bu. more than the previous month at 15.019 billion bu. with yield of 176.5 bu./acre. Corn ending stocks were projected 92 million bu. higher.
The projected season-average corn price received by farmers was unchanged at $5.45/bu.
ERS forecast U.S. soybean production 74 million bu. higher than the previous estimate at 4.4 billion bu. with yield of 51.5 bu./acre. Ending stocks were projected 135 million bu. more than the previous month at 320 million bu.
The season-average soybean price for 2021-22 was forecast 55¢ lower at $12.35/bu. Soybean meal price was projected at $325/short ton, which was $35 less than the previous estimate. The soybean oil price forecast was unchanged at 65¢/lb.
ERS lowered forecast 2021-22 U.S. wheat supplies, domestic use and ending stocks. Projected 2021-22 ending stocks were reduced 35 million bu. to 580 million, which would be the lowest U.S. ending stocks since 2007-08.
“Significantly reduced supplies of Hard Red Spring, Durum, and White wheat for 2021-22 are expected to curtail feed and residual use for the remainder of 2021-22 along with the continued large price premium of wheat over corn,” say ERS analysts.
The projected 2021-22 season-average farm price was raised 10¢/bu. to $6.70 on reported NASS prices to date and price expectations for the remainder of 2021-22.