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Cattle Current Podcast—July 19, 2019

Negotiated cash fed cattle trade continued mainly steady to $1 lower on Thursday, with prices so far this week at $111/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $113.00-$113.50 in Nebraska. Dressed trade so far this week is at $182-$185.

Cattle futures closed lower Thursday, with limited trade, some technical correction and likely positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 72¢ lower.

Feeder Cattle futures closed an average of $1.20 lower.

Sagging corn export sales helped pressure Corn futures 9¢ to 11¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $213.34/cwt. Select was 27¢ higher at $188.61.

Cattle Current Podcast—July 19, 2019 2019-07-18T18:38:40-05:00

Cattle Current Daily—July 19, 2019

Negotiated cash fed cattle trade continued mainly steady to $1 lower on Thursday, with prices so far this week at $111/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $113.00-$113.50 in Nebraska. Dressed trade so far this week is at $182-$185.

Cattle futures closed lower Thursday, with limited trade, some technical correction and likely positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 72¢ lower.

Feeder Cattle futures closed an average of $1.20 lower.

Sagging corn export sales helped pressure Corn futures 9¢ to 11¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $213.34/cwt. Select was 27¢ higher at $188.61.

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Major U.S. financial indices edged higher Thursday, on mixed quarterly earnings and increasing chatter about the Fed cutting interest rates.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 22 points.

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Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.

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Heading into Friday’s monthly Cattle on Feed report, a survey of analysts by Urner Barry suggests 2.1% fewer cattle were placed on feed in June than the previous year. That’s the average of estimates that range from 6.8% fewer to 5.7% more, according to the Daily Livestock Report.

The average estimate for marketings is for 3% fewer, keeping in mind one less business day this year.

On average, estimates see the July 1 on-feed inventory being 1.8% more.

Cattle Current Daily—July 19, 2019 2019-07-18T18:36:38-05:00

Cattle Current Podcast—July 18, 2019

Fed cattle markets were mixed on Wednesday.

Country trade in Kansas was $1 lower than last week on a live basis at $111/cwt., on moderate trade and demand, according to the Agricultural Marketing Service.

Likewise, $111 bought the 326 head offered in the weekly Fed Cattle Exchange auction: 243 head for delivery at 1-9 days and 83 head for delivery at 1-17 days.

At fat auctions in the north, though, prices were higher.

Slaughter steers and heifers sold fully $1 higher at Sioux Falls Regional in South Dakota: $115.35/cwt. for Ch 2-3 steers at an average of 1,400 lbs.

At the fat auction in Tama, Iowa Ch 2-4 steers sold $3.50-$4.00 higher at $118.50 and an average weight of 1,338 lbs. Choice heifers sold $3 higher.

Feeder Cattle led Cattle futures lower Wednesday, perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 52¢lower.

After 47¢lower in spot Aug, Feeder Cattle futures closed an average of $1.12 lower.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed mostly 4¢ to 5¢ lower.

Wholesale beef values were weak to lower on light demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 36¢ lower Wednesday afternoon at $212.57/cwt. Select was 82¢ lower at $188.34.

Cattle Current Podcast—July 18, 2019 2019-07-17T19:52:54-05:00

Cattle Current Daily—July 18, 2019

Fed cattle markets were mixed on Wednesday.

Country trade in Kansas was $1 lower than last week on a live basis at $111/cwt., on moderate trade and demand, according to the Agricultural Marketing Service.

Likewise, $111 bought the 326 head offered in the weekly Fed Cattle Exchange auction: 243 head for delivery at 1-9 days and 83 head for delivery at 1-17 days.

At fat auctions in the north, though, prices were higher.

Slaughter steers and heifers sold fully $1 higher at Sioux Falls Regional in South Dakota: $115.35/cwt. for Ch 2-3 steers at an average of 1,400 lbs.

At the fat auction in Tama, Iowa Ch 2-4 steers sold $3.50-$4.00 higher at $118.50 and an average weight of 1,338 lbs. Choice heifers sold $3 higher.

Feeder Cattle led Cattle futures lower Wednesday, perhaps with some positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 52¢lower.

After 47¢ lower in spot Aug, Feeder Cattle futures closed an average of $1.12 lower.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed mostly 4¢ to 5¢ lower.

Wholesale beef values were weak to lower on light demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 36¢ lower Wednesday afternoon at $212.57/cwt. Select was 82¢ lower at $188.34.

*******************************

Major U.S. financial indices closed lower Wednesday, on mixed quarterly earnings and ongoing concerns about unresolved trade issues with China.

The Dow Jones Industrial Average closed 115 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 37 points.

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Fed steer prices (5-area direct) declined 15% from the spring peak of $128.96/cwt. to $110.13 for the week ending June 30, according to USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook.

As mentioned recently in Cattle Current, based on recent price data, USDA lowered the expected third-quarter price for fed steers by $3, from the previous month’s forecast to an average of $107. The fourth-quarter price was reduced $4 to $110.

“As the result of lower forecast fed cattle prices and higher feed prices relative to last year in in second-half 2019, feedlots will likely be less willing to bid up prices for feeder cattle,” ERS analysts say. “Based on recent price data, the third-quarter feeder steer price (Oklahoma City) was lowered by $2 to $143/cwt. and the fourth-quarter price forecast was lowered $1 from the prior month to $141.

As a result, this month’s annual price forecast for 2019 was $1 lower at $141. The 2020 annual price forecast was unchanged.”

Cattle Current Daily—July 18, 2019 2019-07-17T19:48:42-05:00

Cattle Current Podcast—July 17, 2019

Cattle futures closed lower Tuesday, with little in the way of fundamental news and perhaps some technical pressure.

Live Cattle futures closed an average of 39¢ lower.

Feeder Cattle futures closed an average of 58¢ lower.

Grain markets continued to decline Tuesday, with positive crop weather news and the stronger U.S. dollar.

Corn futures closed 3¢ to 5¢ lower though Jul ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 34¢ lower Tuesday afternoon at $212.93/cwt. Select was 5¢ lower at $189.16.

Cattle Current Podcast—July 17, 2019 2019-07-16T18:58:07-05:00

Cattle Current Daily—July 17, 2019

Cattle futures closed lower Tuesday, with little in the way of fundamental news and perhaps some technical pressure.

Live Cattle futures closed an average of 39¢ lower.

Feeder Cattle futures closed an average of 58¢ lower.

Grain markets continued to decline Tuesday, with positive crop weather news and the stronger U.S. dollar.

Corn futures closed 3¢ to 5¢ lower though Jul ’20 and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 34¢ lower Tuesday afternoon at $212.93/cwt. Select was 5¢ lower at $189.16.

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Major U.S. financial indices edged lower Tuesday, although the nascent quarterly earnings season is mostly positive thus far.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 10 points lower. The NASDAQ was down 35 points.

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“Feeder cattle prices are determined by several factors, with feed price and fed cattle price having the greatest impact,” explains Brenda Boetel, Extension agricultural economist at the University of Wisconsin-River Falls, in the latest issue of In the Cattle Markets. “Corn price has typically had an inverse relationship to both fed and feeder cattle prices. This means, as the price of corn increases, the price of feeder cattle decreases. This assumes that all other factors have remained constant, including other feeding costs, as well as fed cattle price.”

As corn price increases, the price premium declines for lighter feeder cattle weights versus heavier ones. Spun differently, the price slide narrows as corn price moves higher.

“This isn’t a new finding. What is new is that the decrease in these beef steer price differentials is at an increasing rate as weight increases, i.e., the premiums for lightweight cattle will decrease faster than has historically been found in economic studies,” Boetel says.

That was among the conclusions drawn from research conducted by Boetel last year with Lee Schultz, a peer at Iowa State University and with Kevin Dhuyvetter, cattle technical consultant with Elanco Animal Health. The study—in the Western Economics Forum—included 66,640 head of beef feeder steers and 59,005 head of dairy feeders.

“Although cattle producers can’t affect the corn price, understanding how changing corn price affects price slides can aid in management and marketing decisions,” Boetel says.

Cattle Current Daily—July 17, 2019 2019-07-16T18:56:01-05:00

Cattle Current Podcast—July 16, 2019

Negotiated cash fed cattle trade ended up $2-$3 higher in the Southern Plains last week at $111-$112/cwt. Live sales were steady to either side of even in Nebraska at mostly $112-$114, but $1-$3 higher in the western Corn Belt at $115. Dressed trade was $2-$5 higher at $182-$185.

Cattle futures closed narrowly mixed on Monday, although Feeder Cattle received some support from sharply lower grain futures prices.

Live Cattle futures closed narrowly mixed, from 20¢ lower to 10¢ higher.

Feeder Cattle futures closed an average of 19¢ higher.

Grain markets dove lower Monday with likely profit taking, as well as more favorable weather.

Corn futures closed 9¢ to 13¢ lower though Jul ’20 and then fractionally lower to 6¢ lower.

Soybean futures closed mostly 9¢ to 11¢ lower.

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $213.27/cwt. Select was 39¢ lower at $189.21.

Cattle Current Podcast—July 16, 2019 2019-07-15T19:29:47-05:00

Cattle Current Daily—July 16, 2019

Negotiated cash fed cattle trade ended up $2-$3 higher in the Southern Plains last week at $111-$112/cwt. Live sales were steady to either side of even in Nebraska at mostly $112-$114, but $1-$3 higher in the western Corn Belt at $115. Dressed trade was $2-$5 higher at $182-$185.

Cattle futures closed narrowly mixed on Monday, although Feeder Cattle received some support from sharply lower grain futures prices.

Live Cattle futures closed narrowly mixed, from 20¢ lower to 10¢ higher.

Feeder Cattle futures closed an average of 19¢ higher.

Grain markets dove lower Monday with likely profit taking, as well as more favorable weather.

Corn futures closed 9¢ to 13¢ lower though Jul ’20 and then fractionally lower to 6¢ lower.

Soybean futures closed mostly 9¢ to 11¢ lower.

Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 47¢ higher Monday afternoon at $213.27/cwt. Select was 39¢ lower at $189.21.

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Major U.S. financial indices edged higher Monday, on the cusp of quarterly earnings season.

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed fractionally higher. The NASDAQ was up 14 points.

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“Uncertainty continues to plague cattle markets with broader trade and political uncertainty augmented by unknown and evolving feed market conditions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Corn will no doubt be higher on a smaller crop this year but exactly how much higher and smaller remains an unknown.”

Undoubtedly, that uncertainty was part of the damper on a seasonal increase in feeder cattle prices, until last week. With the recent uptick, Peel says feeder markets may be set to increase seasonally over the month, on their way to a typical late-summer price peak.

Although the most recent trade data showed some improvement, Peel adds, “Domestic beef markets continue to struggle under relatively poor summer grilling weather thus far and struggling macroeconomic conditions. Ample supplies of meat are weighing more heavily on the market, as well. In particular, large pork supplies and the failure of anticipated Chinese demand for pork to materialize is pushing pork wholesale values lower, adding to beef wholesale price pressure.”

Cattle Current Daily—July 16, 2019 2019-07-15T19:24:29-05:00

Cattle Current Weekly Highlights—Week ending July 12, 2019

Finally, feeder cattle markets gained some seasonal steam last week.

Overall, steers and heifers traded steady to $5/cwt. higher early in the week and then $3-$10 higher, according to the Agricultural Marketing Service (AMS).

“Market activity at special sales throughout the country was strong, especially after Tuesday’s rally on the CME Feeder board. Traders quickly and aggressively

moved back into the market,” say AMS analysts.

On the other side of the trade, the AMS folks note, “Ranchers were ready

and willing to sell cattle out front with the market getting a little bounce.” Analysts are referring to heavy video trade last week, including 118,000 via the Western Video Market and 209,000 head at Superior’s week-long auction. 

Feeder Cattle futures closed an average of 3.11 higher week to week on Friday.

At $141.06 on Thursday, the CME Feeder Cattle Index was $7.85 higher week to week, at the highest level since the first two days of May.

“The surge in the index value is largely due to cattle feeders looking to reload pens that have emptied recently. It makes logical sense that cattle feeders were looking to capitalize on a somewhat soft feeder cattle market in May and June, but the strong demand for feeder cattle has boosted prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Fed Cattle Prices Appeared Higher

Negotiated cash fed cattle prices were yet to be fully established through Friday afternoon, based on reports from AMS, but the trend appeared decidedly higher. The Texas Cattle Feeders Association reported its members trading at $112/cwt., which was $3 more than the previous week. Although too few to trend, early dressed sales were $2-$5 higher at $182-$185 in Nebraska and the western Corn Belt.

“It appears the packer needs inventory and the fed cattle market is bracing

for a higher market,” explain AMS analysts. “Market-ready fed cattle supplies in the Northern Plains are very current, and for the time being, will remain that way. The Southern Plains will more than likely remain at a discount because of

large numbers of cattle on feed.”

After 77¢ higher in spot Aug, Live Cattle futures an average of $1.80 higher week to week on Friday.

Wholesale beef values continue the seasonal decline.

Choice boxed beef cutout value was $4.87 lower week to week on Friday afternoon at $212.80/cwt. Select was $5.20 lower at $189.60.

“Even though the cutout has turned lower, packer margins are reading on the positive side, despite having to increase bids to get cattle purchased,” according to AMS.

U.S. beef exports continue to underpin cattle prices but are getting iffier with protracted unresolved trade issues. Beef exports in May were steady with the previous year for volume (117,541 metric tons) and slightly higher for value at $727.6 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However export volume for January-May is 3% less year over year, while value is slightly lower at $3.3 billion.

“Beef exports to Japan, the leading beef export market, were down by 4.9% year over year in May and are down 4.5% for the first five months of 2019,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef exports to Japan are beginning to show the impact of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), in which the U.S. does not participate, leaving the U.S. at a bigger tariff disadvantage.”

In fact, according to USMEF, all of U.S. pork and beef’s major competitors gained tariff relief in Japan this year through that agreement, as well as the economic partnership agreement between Japan and the European Union.

Corn Price Uncertainty Continues

Wonderments about how many acres of corn were planted and the ultimate yield, due to the long wet spring continue to roil markets.

Despite last week’s bearish World Agricultural Supply and Demand Estimates (WASDE) shaving a dime off the projected season average corn price to $3.70/bu., Corn futures closed an average of 15¢ higher through the front six contracts week to week on Friday. The WASDE was based on the acreage and yield projections from the June 28 USDA Acreage report. Traders are betting there will be significantly less corn.

In July, USDA’s National Agricultural Statistics Service (NASS) will collect updated information on 2019 acres planted, and if the newly collected data justify any changes, NASS will publish updated acreage estimates in the August Crop Production report.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 12

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

135,700

(+111,000)

77,700

(+50,500)

121,100

(+81,900)

335,500

(+244,400)

 

CME Feeder Index

CME Feeder Index* July 11 Change
  $141.06 + 7.85

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 12 Change
600-700 lbs. $165.82 +  $4.44
700-800 lbs. $156.78 +  $3.14
800-900 lbs. $147.03 +$10.36

 

South Central

Steers-Cash July 12 Change
500-600 lbs. $154.41 –   $4.06
600-700 lbs. $147.82 –   $0.24
700-800 lbs. $142.10 +  $2.61

 

Southeast

Steers-Cash July 12 Change
400-500 lbs. $147.68 +  $3.23
500-600 lbs. $141.05 +  $1.80
600-700 lbs. $134.76 +  $3.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 12 ($/cwt) Change
Choice $212.80 –   $4.87
Select $189.60 –   $5.20 
Ch-Se Spread $23.20 +  $0.33

 

Futures

Feeder Cattle  July 12 Change
Aug $141.600 + $2.775
Sep $142.550 + $3.850
Oct $142.850 + $3.950
Nov $142.625 + $3.400
Jan ’20 $141.025 + $3.075
Mar $139.875 + $3.000
Apr $140.175 + $2.600
May $140.250 + $2.200

 

Live Cattle   July 12 Change
Aug $108.475 + $0.775
Oct $109.975 + $1.900
Dec $114.225 + $1.900
Feb ’20 $118.150 + $1.925
Apr $120.125 + $1.825
Jun $113.300 + $1.825
Aug $111.550 + $1.725
Oct $113.375 + $1.550
Dec $114.850 + $1.750

 

Corn futures July 12 Change
Jul $4.494 + $0.154
Sep $4.542 + $0.156
Dec $4.592 + $0.170
Mar ’20 $4.650 + $0.160
May $4.666 + $0.142
Jul $4.676 + $0.120

 

Oil CME-WTI July 12 Change
Aug $60.21 + $2.70
Sep $60.30 + $2.71
Oct $60.27 + $2.71
Nov $60.15 + $2.67
Dec $59.96 + $2.61
Jan ’20 $59.70 + $2.53

 

Equities

Equity Indexes July 12 Change
Dow Industrial Average  27332.03 + 409.91
NASDAQ     8244.14 +   82.35
S&P 500     3013.77 +   23.36
Dollar (DXY)          96.72 –      0.45
Cattle Current Weekly Highlights—Week ending July 12, 2019 2019-07-14T15:20:50-05:00

Cattle Current Podcast—July 15, 2019

Negotiated cash fed cattle prices were yet to be fully established through Friday afternoon, based on reports from USDA’s Agricultural Marketing Service (AMS), but the trend appeared decidedly higher. The Texas Cattle Feeders Association reported its members trading at $112/cwt., which was $3 more than the previous week. Although too few to trend, early dressed sales were $2-$5 higher at $182-$185 in Nebraska and the western Corn Belt.

Live Cattle futures closed an average of 31¢ higher on Friday (7¢ to 65¢ higher), helped along by recent strength and what looked to be steady to higher cash fed prices for the week. 

Feeder Cattle futures closed an average of 83¢ lower, giving back some of the recent gains, under pressure from higher Grain futures prices. They traded and average of $3.11 higher week to week, though.

Grain markets largely shrugged off the previous day’s monthly World Agricultural Supply and Demand Estimates, given that projections were based on acres from the June 28 Acreage report, which common sense says will change. Between that and potential damage from hot and dry weather, following the interminable rains, grain futures surged on Friday.

After 1¢ higher in expiring spot Jul, Corn futures closed 9¢ to 11¢ higher though Jul ’20 and then mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 10¢ to 14¢ higher.

Wholesale beef values continued to lose seasonal steam. Trade on Friday was  lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 97¢ lower Friday afternoon at $212.80/cwt. Select was $1.19 lower at $189.60.

Cattle Current Podcast—July 15, 2019 2019-07-14T14:31:29-05:00

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This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.