If yesterday’s weekly Fed Cattle Exchange auction is any indication, cash fed cattle prices this week should be at least steady. There were seven lots of heifers (1,469 head) from Nebraska selling for a weighted average price of $110/cwt. (1-9 day delivery). That was steady with the previous week’s country trade in that region. There were no sales of the other 656 head offered, although one lot was passed out at $112.
Cattle futures closed mostly slightly higher Wednesday with increased open interest in Feeder Cattle, but continued contraction in open interest for Live Cattle. Despite trade worries and a limit-down move in Lean Hogs, there appears a growing sense that Cattle futures are turning the corner past the bottom. Perhaps notions that feedlot placements were lower again last month (see below) added some firmness.
Except for 5¢ lower and 2¢ lower in Feb and Apr, respectively, Live Cattle futures closed an average of 30¢ higher (12¢ to 77¢ higher).
Except for 20¢ lower in spot Aug, Feeder Cattle futures closed an average of 32¢ higher (5¢ to 97¢ higher).
Boxed beef cutout values were lower on light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.41 lower in the afternoon at $218.29/cwt. Select was $1.25 lower at $201.05.
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Major U.S. financial indices closed mixed Wednesday, buoyed by tech stocks, but pressured by lingering trade wonderments.
The Dow Jones Industrial Average closed 42 points lower. The S&P 500 closed 4 points higher. The NASDAQ closed 55 points higher.
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Heading into Friday’s monthly Cattle on Feed report, most analysts are expecting to see May placements 1-4% less year over year, May marketings 5% more and the June 1 on-feed inventory 3-4% more than last year.
For instance, analysts with Allendale, Inc. estimate May Placements 1.4% lower than last year at 2.089 million head. That would be the third consecutive month of year over year declines.
“Concerns over cattle feeding margins have limited interest in new placements,” say Allendale analysts. “May and June finished cattle have a $128 breakeven according to Kansas State University. The remainder of the year is set to be unprofitable with breakevens from $118 to $122. May placements supply the September through December slaughter period.”
Allendale projects May marketings to be 5.2% more than last year at 2.052 million head. “This would be the largest May marketing in 10 years,” say Allendale analysts.
For the Allendale folks, that would leave an estimated 11.519 million head on feed June 1, which would be 3.8% more than last year and the most for the month in the history of the current data series that began in 1996.