Sharply lower outside markets pressured by higher inflation than expected compounded the previous day’s lower corn yield estimates, weighing on Cattle futures.
Feeder Cattle futures closed an average of $1.88 lower ($1.10 to $2.60 lower).
Live Cattle futures closed an average of 77¢ lower.
That was with Corn futures retreating on the same macroeconomic news.
Corn futures closed 1¢ to 3¢ lower through Sep ‘23, then mostly fractionally higher.
Soybean futures closed mostly 3¢ to 9¢ lower through Jly ‘23 and then mostly 1¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $141/cwt. in the Southern Plains, $142-$143 in Nebraska and $143-$146 in the western Corn Belt. Dressed prices were $226 in Nebraska and $225-$230 in the western Corn Belt.
Choice Boxed beef cutout value was $2.28 lower through Tuesday afternoon at $256.66/cwt. Select was $2.18 lower at $233.58/cwt.
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As alluded to, Major U.S. financial indices plunged Tuesday on a steamier inflation reading than expected.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in August on a seasonally adjusted basis after being unchanged in July, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment. The all-items less food and energy index rose 6.3% over the last 12 months.
The Dow Jones Industrial Average closed 1,276 points lower. The S&P 500 closed 177 points lower. The NASDAQ was down 632 points.
West Texas Intermediate Crude Oil futures on the CME closed 47¢ to 78¢ lower through the front six contracts.
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The latest World Agricultural Supply and Demand Estimates (WASDE) underscored elevated heifer and cow slaughter by increasing expected beef production this year to 26.33 billion lbs. That’s 70 million lbs. more than the previous month’s projection, with higher anticipated slaughter in the second half of the year offset slightly by lower expected third-quarter carcass weights.
“While increased cow and heifer slaughter totals are contributing to higher beef production this year, the longer-run implications are tighter supplies,” explains Josh Maples, Extension livestock economist at Mississippi State University, in a recent issue of Cattle Market Notes Weekly. “The higher slaughter totals imply fewer cows and fewer replacement heifers to produce calves. The current WASDE projection for 2023 beef production would be about 6% below the current 2022 projection. Price expectations are reflecting these tighter supplies.”
WASDE analysts estimated this year’s annual weighted average five-area direct fed steer price 70¢ higher at $142.80/cwt. Prices are forecast to be $143 in the third quarter and $147 in the fourth quarter. Next year’s projected average price was unchanged at $154.