Stronger cash fed cattle prices last week, the prospect for further gains this week and recently higher wholesale beef prices helped Cattle futures extend gains Tuesday.
Feeder Cattle futures closed an average of $1.73 higher, except for 7¢ higher in spot Oct.
Live Cattle futures closed an average of 50¢ higher (15¢ to 60¢ higher), except for unchanged in the back contract.
Negotiated cash fed cattle trade was at a standstill in the Southern Plains and Nebraska through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trade was limited on light demand.
Last week, live prices were $145/cwt. in the Southern Plains and $148 in Nebraska and the Western Corn Belt. Dressed prices were $232 in Nebraska and $230-$232 in the western Corn Belt.
Choice Boxed beef cutout value was $2.64 higher Tuesday afternoon at $250.78/cwt. Select was $1.67 higher at $221.28/cwt.
Corn futures closed 2¢ to 3¢ lower. Soybean futures closed mostly 9¢ to 13¢ lower through Jly ’23 and then mostly 4¢ lower.
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Major U.S. financial indices extended gains Tuesday with positive quarterly corporate earnings reports, led by tech stocks.
The Dow Jones Industrial Average closed 337 points higher. The S&P 500 closed 42 points higher. The NASDAQ was up 98 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.47 to $2.64 lower through the front six contracts.
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Despite firm feedlot demand expected for the remainder of this year, between current price data and higher projected feed prices than in last month’s forecast, USDA’s Economic Research Service lowered the fourth-quarter price projection for feeder steers $4 to $173/cwt. with an annual average price of $164.93. That’s basis 750-800 lbs. steers selling at Oklahoma City.
“Based on a weaker outlook than last month for winter grazing on small grains, expected feeder calf placements were raised for the remainder of 2022, tempering expectations for supplies of stocker cattle entering feedlots in early 2023,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook. “The price projection in first-quarter 2023 is raised $3 to $175. However, feed prices are forecast to be slightly higher for the 2022-23 crop year and expected feeder calf price increases in the second half of the year were moderated.”
ERS projects feeder steer prices next year at $190 in the second quarter, $214 in the third quarter with an annual average price of $200.75.