The USDA WASDE report came out today and showed that red meat production is expected to drop due to a lower carcass weight by 2023.
Beef import forecasts for 2022 and 2023 are unchanged from last month. Export forecasts are raised for both years based on firm international demand. The 2nd quarter cattle price forecasts for the ’22 year are raised due to an expected higher packer demand.
The Cattle on Feed report comes out next Friday (22nd) will show a better indication for the heifer retention and the ’22 calf crop.
After yesterday’s strong move, there was a follow through in the market today in Dec cattle and seemed to break out of the range that it was in for the past couple weeks. Today the move hit a low of 145.85 but bounced off the low to close up .70 at 147.20. Traders are still concerned about the expected heat spike that would cause the weights to drop and prices to strengthen. In my opinion, I think Dec cattle’s next move would be to the June highs at 148.85. If the heat continues to rise then I suspect another dollar to the upside in the market is plausible. As mentioned above, the July 22nd CoF report will give a better outlook to the 4th quarter production. The 5-area weighted average steer price last week was 144.35, down from 146.16 the previous week but up from 122.16 a year ago. USDA estimated cattle slaughter came in at 125,000 which was up from 2,000 last week (holiday week) and 119,000 a year ago.