Sluggish cash trade with weaker undertones and recent significant declines in wholesale beef value pressured Cattle futures Wednesday.
Feeder Cattle futures closed an average of 40¢ lower, except for an average of 24¢ higher in the front two contracts.
Live Cattle futures closed an average of 77¢ lower (32¢ to $1.32 lower).
Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service. Live sales on Tuesday were steady in Nebraska at $145/cwt.
Last week, live prices were $142 in the Southern Plains and $147-$148 in the western Corn Belt. Dressed prices were $232 in Nebraska and $232-$234 in the western Corn Belt.
Choice Boxed beef cutout value was $1.45 lower Wednesday afternoon at $258.34/cwt. Select was $1.94 lower at $237.74/cwt.
Corn futures continued to weaken Wednesday, closing 2¢ to 6¢ lower with pressure including concerns about global economic growth. Soybean futures closed mostly 5¢ to 9¢ lower.
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Major U.S. financial indices and Crude Oil futures closed lower again Wednesday with resurgent concerns about possible recession as central banks boost interest rates to combat inflation.
The Dow Jones Industrial Average closed 280 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 66 points.
West Texas Intermediate Crude Oil futures on the CME closed $1.61 to $2.15 lower through the front six contracts.
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Retail food prices increased 8.9% in the first seven months of this year, higher than the rate over the same period in 2021 (1.9%) and 2020 (3.1%), according to USDA’s Economic Research Service (ERS). The 20-year historical average for the same months from 2001 to 2020 was 1.7%.
All food categories saw price increases of at least 4% in the first seven months of this year.
“Prices for three food categories increased by more than 10%: eggs (20.9%), fats and oils (13.4%), and poultry (11.8%),” ERS analysts explain. “Inflationary pressures differ by food category. For example, eggs and poultry prices are currently much higher than their historical average in part because of an outbreak of highly pathogenic avian influenza (HPAI). Fresh vegetables historically experienced higher midyear average price increases compared to most categories, but prices for fresh vegetables increased the least of all categories over the first seven months of both 2022 (4.9%) and 2021 (0.4%).”
ERS projects food-at-home prices will increase between 10% and 11% in 2022.