Cattle futures ran out of steam Wednesday, although the latest World Agricultural Supply and Demand Estimates continue to paint a positive fundamental picture (see below).
Feeder Cattle futures closed an average of 43¢ lower, except for 2¢ higher in spot Mar.
Live Cattle futures closed an average of 90¢ lower, except for 5¢ higher in the back contract.
Cattle futures were helped by lower Grain and Soybean futures as traders apparently were satisfied with the level of risk premium.
Negotiated cash fed cattle trade and demand were moderate in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Live trade was steady with the previous day and $2 lower than last week at $138/cwt. Dressed trade was $4-$5 lower at $220.
Trade was limited on light demand in Kansas with live prices at $138; steady with the previous day and $2 lower than last week.
Elsewhere, trade ranged from limited on light demand to mostly inactive with very light demand and too few transactions to trend. Live prices in the Texas Panhandle so far this week are $2 lower at $138. Trade was unestablished in the western Corn Belt where live prices last week were $142 and dressed prices were $224-$225.
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Major U.S. financial indices closed sharply higher, buoyed by lower Crude Oil futures and cooling commodity prices, at least for the day.
The Dow Jones Industrial Average closed 653 points higher. The S&P 500 closed 107 points higher. The NASDAQ was up 460 points.
West Texas Intermediate Crude Oil Futures (CME) closed $12.19 to $15.00 lower in the front six contracts.
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“Fed cattle prices are raised on firm packer demand and declining inventories of fed cattle,” say analyst with USDA’s Economic Research Service (ERS), in the latest World Agricultural Supply and Demand Estimates (WASDE).
ERS projects the annual five-area direct fed steer price the year $17.10 higher than last year at $139.50/cwt. That’s $2.00 more than the previous month’s projection.
Forecast prices are $140 in the first quarter, $139 in the second, $136 in the third and $142 in the fourth quarter.
Estimated beef production this year of 27.57 billion lbs. would be 367 million lbs. less (-1.3%) than last year. “The beef production forecast is raised from the previous month on higher fed and non-fed cattle slaughter,” according to ERS.
Estimated total red meat and poultry production this year of 106.47 billion lbs. would be 324 million lbs. less (-0.3%) than the prior year.
“Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally,” say ERS analysts. “The March WASDE represents an initial assessment of the short-term impacts as a result of this action.”