Cattle futures and other commodity futures closed lower Thursday with the higher dollar and apparent fund selling tied to yesterday’s comments from the Fed suggesting interest rates will stay higher for longer. Wariness over Friday’s Cattle on Feed report could have added pressure.
Feeder Cattle futures closed an average of $2.31 lower (90¢ lower in spot Sep to $2.87 lower).
Live Cattle futures closed an average of $1.80 lower ($1.57 to $2.02 lower).
Negotiated cash fed cattle trade ranged from slow on light to moderate demand to a standstill through Thursdayafternoon, according to the Agricultural Marketing Service.
Dressed delivered prices were steady in Nebraska at $292/cwt. FOB live prices last week were $184-$185.
Elsewhere last week, FOB live prices were $182-$183/cwt. in the Southern Plains and $185 in the western Corn Belt, where dressed delivered prices were $292.
Choice boxed beef cutout value was 67¢ higher Thursday afternoon at $301.93/cwt. Select was 32¢ higher at $279.00/cwt.
Net U.S. beef export sales (2023) of 13,700 metric tons were up noticeably from the previous week and up 15% from the prior four-week average, according to the U.S. Export Sales report for the week ending Sept. 14. Increases primarily for Japan, South Korea, China, Mexico and Canada.
Turning to row crops, grain and Soybean futures closed lower with the pressure from outside markets.
Corn futures closed mostly 4¢ to 7¢ lower.
KC HRW Wheat closed 12¢ to 18¢ lower through May ‘25 and then mostly fractionally lower.
Soybean futures closed mostly 16¢ to 26¢ lower.
Major U.S. financial indices closed lower Thursday with negative economic news including higher treasury yields and threats of a U.S. government shutdown.
The Dow Jones Industrial Average closed 370 points lower. The S&P 500 closed 72 points lower. The NASDAQ was down 245 points.
West Texas Intermediate Crude Oil futures (CME) closed marginally mixed through the front six contracts.
The Organization for Economic Cooperation and Development (OECD) expects global economic growth to moderate the rest of this year and next amid tighter monetary policy, according to the OECD Economic Outlook, Interim Report September 2023.
“Further significant stress in financial markets has been avoided so far, after the turbulence due to bank failures earlier in the year. That said, the global economy continues to confront the challenges of elevated inflation, low growth and comparatively weak trade,” says Mathias Cormann, OECD Secretary-General.
Annual GDP growth in the United States is projected at 2.2% in 2023 and 1.3% in 2024, with the slowdown driven by cooler labor markets and the effects of tighter monetary policy. In the euro area, where demand is already subdued, GDP growth is projected to ease to 0.6% in 2023, and edge up to 1.1% in 2024 as the adverse impact of high inflation on real incomes fades. China’s recovery is weaker than expected following the post-pandemic re-opening, with growth projected at 5.1% this year and 4.6% in 2024.
The Outlook highlights a range of downside risks. For instance, according to the report, inflation could continue to prove more persistent than projected, with further disruptions to energy and food markets still possible. A further slowdown in China would dampen growth in trading partners worldwide and could drag down business confidence. Public debt remains elevated in many countries, in the aftermath of significant fiscal support rolled out in response to the COVID-19 pandemic and the energy price crisis.