WLI

Negotiated cash fed cattle trade broke out in the north yesterday. Live sales were as much as $4 higher in Nebraska and the western Corn Belt at $130/cwt. Dressed trade was $2-$3 higher at $207-$208.

Lighter carcass weights continue to provide support. The average dressed steer weight for the week ending Apr. 6 was 865 lbs., which was 7 lbs. less than a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 5 lbs. less at 804 lbs.

Except bouncing higher in the front month, Live Cattle futures closed mixed Thursday, while Feeder Cattle edged higher as traders positioned ahead of the holiday weekend and ahead of the monthly Cattle on Feed report (see below). More on that report momentarily.

Other than $1.60 higher in spot Apr, Live Cattle futures closed narrowly mixed, from 15¢ lower to 30¢ higher.

Feeder Cattle futures closed an average of 49¢ higher (22¢ to 95¢ higher).

Corn futures closed mostly fractionally mixed.

Soybean futures closed mostly 1¢ higher.

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

Choice boxed beef cutout value was 30¢ higher Thursday afternoon at $233.06/cwt. Select was 70¢ lower at $219.46. At $13.60, the Choice-Select spread was the widest since December.

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Major U.S. financial indices strengthened Thursday, buoyed by positive quarterly earnings reports and an uptick in retail sales. The U.S. Census Bureau estimated March retail sales to be 1.6% more than the previous month, significantly higher than trade expectations.

The Dow Jones Industrial Average closed 110 points higher. The S&P 500 closed 4 points higher. The NASDAQ was up 1 point.

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The monthly Cattle on Feed report will likely be viewed as neutral to a touch bearish, with slightly more March placements and total cattle on feed than most pre-report estimates. The report is for feedlots with a one-time capacity of 1,000 head or more.

There were 2.01 million head placed on feed in March, which was 4.84% more (+93,000 head) than the previous year. In terms of placement weights: 16.14% (325,000) head went on feed weighing 600 lbs. or less; 14.89% (300,000 head) weighing 600-699 lbs.; 29.54% (595,000) weighing 700-799 lbs.; 26.76% (539,000 head) weighing 800-899 lbs.; 9.19% (185,000 head) weighing 900-999 lbs.; 3.48% (70,000 head) weighing 1,000 lbs. or more.

Marketings in March of 1.78 million head were 3.42% fewer (-63,000 head) than last year.

All told, there were 11.96 million head on feed Apr. 1, which was 2.00% more (+235,000 head) than a year earlier. That’s the largest inventory since the data series began in 1996. The inventory included 4.51 million heifers and heifer calves, which was 320,000 head more (+7.62%) than the same time a year earlier.

Negotiated cash fed cattle trade got underway in the Southern Plains on Wednesday at $126/cwt. on a live basis, which was $2 higher than the previous week.

Out of the 1,578 head offered in the weekly Fed Cattle Exchange auction, 1,269 head sold—all from Nebraska—for a weighted average price of $127.08/cwt.; all for delivery at 1-17 days.

Choice 2-3 steers brought $126-$128/cwt. at Sioux Falls Regional in South Dakota.

Cattle futures closed mixed but mostly higher Wednesday as traders positioned for the holiday-shortened trading week.

Except for 22¢ and 7¢ lower in the front two contracts, Live Cattle futures closed an average of 46¢ higher.

Other than an average of 47¢ lower in the front two contracts and 5¢ lower at the back, Feeder Cattle futures closed an average of 58¢ higher. Popular estimates suggest tomorrow’s monthly Cattle on Feed report to show March placement about 4% more than a year earlier.

Corn futures closed fractionally lower.

Soybean futures closed 6¢ to 9¢ lower as global production and stocks continue to weigh on prices.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 71¢ higher Wednesday afternoon at $232.76/cwt. Select was 99¢ lower at $220.16.

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Major U.S. financial indices wobbled on Wednesday. Despite strong quarterly earnings reports, traders reportedly fretted over the political uncertainly surrounding health care companies.

The Dow Jones Industrial Average closed 3 points lower. The S&P 500 closed 6 points lower. The NASDAQ was down 4 points.

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Life continues to be tougher for agricultural producers in the middle, according to the recently released 2017 Census of Agriculture from USDA’s National Agricultural Statistics Service (NASS).

For instance, the total number of farms declined between 2012 and 2017, from 2.11 million to 2.04 million.

There were 77,000 farms with sales of $1 million or more, which was 2,000 fewer than in 2012, but 1,000 more farms with sales of $5 million or more.

There were 792,000 farms with sales of less than $2,500, which were 4,000 more (+0.51%) more than 2012.

In between, were farms with sales of $2,500 to $999,999, which totaled 1.17 million. That was 69,000 fewer (-5.56%) than 2012. There were 39,000 fewer farms (-4.85%) with sales of $2,500 to $4,999 and 30,000 fewer farms (-6.85%) with sales of $50,000 to $999,999.

Farms with sales of $5 million or more accounted for fewer than 1% of all farms but 35% of all sales. On the other end of the scale, farms with sales of $50,000 or less accounted for 76% of the farms and 3% of the sales.

Cattle futures gained more ground Tuesday, buoyed by continued strength in Lean Hog futures and firm wholesale beef prices. Feeder Cattle likely received some benefit from lower grain futures.

Live Cattle futures closed an average of 68¢ higher (20¢ to $1 higher).

Except for unchanged and 17¢ higher in the front two contracts, Feeder Cattle futures closed an average of 94¢ higher .

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 8¢ to 10¢ lower.

Wholesale beef values were higher on Choice and steady on Select with moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.07 higher Tuesday afternoon at $232.05/cwt. Select was 7¢ lower at $221.15.

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Major U.S. financial indices edged higher Tuesday, regaining the minimal losses from the previous session. Support included stronger quarterly earnings than expected.

The Dow Jones Industrial Average closed 67 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 24 points.

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Between recent prices and expectations for stronger feedlot demand, USDA increased projected feeder cattle prices for the second quarter by 2$ at the midpoint to $144-$150/cwt., according to the monthly Livestock, Dairy and Poultry Outlook. Prices for the fourth quarter increased $2 at the midpoint, as well, to $140-$152. The annual price forecast increased to $143-$150.

Analysts with USDA’s Economic Research Service (ERS) note the inventory of cattle on feed more than 150 days continued to build in March; 23% more than a year earlier. They expect feedlot placements and marketings in the coming quarters to bring the supply of long-fed cattle more in line with the 5-year average.

“These large supplies of market-ready cattle in feedlots have experienced a tough winter, and the performance of steers and heifers in the feedlot has suffered. Given how long feedlot operations have had to feed these animals, the feedlots may be more inclined to take prices offered than to feed their cattle longer to recover the lost weight,” ERS analysts explain. “As a result, the momentum of the weekly 5-area steer price may have limited upward support, particularly given the strong number of market-ready cattle in early 2019. However, based on expected strength of beef demand as the year progresses, the 2019 annual price forecast was left unchanged at $117-$122/cwt.

Negotiated cash fed cattle prices were steady in the Southern Plains last week at $124/cwt. In late-week trade, live prices were steady to $2 higher in the north at $126-$128 in Nebraska, $127.00-$127.50 in Colorado and at $127-$130 in the western Corn Belt. Dressed trade was steady to unevenly steady at $204-$206.

Sluggish, directionless trade had Cattle futures hovering in mixed action early in Monday’s session. They ended the day grinding a touch higher.

Live Cattle futures closed an average of 18¢ higher, except for 25¢ lower in spot Apr and unchanged in Dec.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed mostly fractionally higher to 1¢ higher.

Soybean futures closed 1¢ to 3¢ higher.

Wholesale beef values were sharply higher on Choice and steady on Select with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $2.23 higher Monday afternoon at $230.98/cwt., the highest since last May. Select was 20¢ higher at $221.22.

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Major U.S. financial indices leaked lower Monday, presumably on mixed quarterly earnings reports.

The Dow Jones Industrial Average closed 27 points lower. The S&P 500 closed 1 point lower. The NASDAQ was down 8 points.

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“With generally good summer forage prospects, stocker cattle demand remains strong with spring calf price peaks continuing into mid-April,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Lightweight feeder cattle prices have yet to confirm a seasonal price peak and may hold steady or even push slightly higher in the next two to three weeks. In Oklahoma, 5-weight steer prices typically drop roughly 7% between the spring peak into July and another 4% to fall lows in October. Large frame, #1 steers (500 lbs.) are currently priced about $186/cwt., suggesting an October low price of roughly $166.”

As for feeder steers (7-weight to 8-weight), Peel says they typically increase to a peak in July before declining in the second half of the year.

“Current steer prices are roughly $148/cwt. (750 lbs., Large #1), suggesting a peak July price of roughly $153 and an October price near $148,” Peel says. “Futures markets are more optimistic than that for feeder markets with current Feeder Cattle futures prices for the summer and fall well above these levels. This may provide a pricing opportunity for summer or fall feeder sales.”

Although cash cattle prices may have peaked in late March at nearly $129/cwt., Peel believes lingering weather impacts could fuel one more price surge in the next few weeks.

“Beef production thus far this year is down 0.7% year over year but weekly beef production the last four weeks has averaged 1.8% higher year over year,” Peel says. “Beef production typically increases from the first quarter to the third quarter of the year. The seasonal increase in beef production may be tempered somewhat in the coming weeks by lower carcass weights and other lingering impacts of severe weather this winter and spring. Normal seasonality of fed prices indicates that fed prices will likely drop to +/- $120/cwt. for fall lows.”