WLI

Negotiated cash fed cattle trade ended up mainly steady to $1 lower last week at $111/cwt. in the Southern Plains, $113.00-$113.50 in Nebraska and $114-$116 in the western Corn Belt. Dressed trade was steady at $182-$185.

Cattle futures closed higher Friday, with support from Lean Hogs and perhaps some boost from the potential impact excessive heat will have on production.

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed 5¢ to 6¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 15¢ to 20¢ higher through Sep ’20 and then mostly 13¢ higher.

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

Choice boxed beef cutout value was 8¢ higher Friday afternoon at $213.42/cwt. Select was 90¢ higher at $189.51.

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Major U.S. financial indices closed lower Friday, amid mixed quarterly earnings reports and geopolitical angst stemming from Iran’s seizure of a British oil tanker.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 60 points.

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There were no surprises in Friday’s monthly USDA Cattle on Feed report (feedlots with 1,000 head or more capacity), with the numbers about dead on with pre-report estimates.

Cattle feeders placed 1.76 million head in June, which was 2.34% (-42,000 head) less than a year earlier. In terms of placement weight, 38.72% weighed less than 699 lbs., 44.48% weighed 700-899 lbs. and 16.80% weighed 900 lbs. or more.

Marketings in June of 1.94 million head were 3.04% (-61,000 head) less than the previous year, keeping in mind there was one less business day this year.

Cattle on feed July 1 of 11.48 million head were 1.75% (+198,000 head) more than last year. This makes the third month in a row that the on-feed number was the largest since the data series began in 1996, according to the Agricultural Marketing Service.

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USDA’s semiannual Cattle report hints at slowing herd expansion and fewer calves year over year.

The nation’s herd of beef cows—34.0 million head—was the same as a year earlier.

All cattle and calves were 103 million head July 1, even with the same time a year ago.

The estimated feeder cattle supply outside feedlots July 1 was 37.1 million head, which is 0.3% more than last year. However, the 4.4 million head of heifers for beef replacement were 200,000 head (-4.5%) less than the previous July.

As well, this year’s estimated calf crop of 36.3 million head was 102,700 (-0.3%) fewer than the same period a year earlier. That’s with an estimated 26.5 million calves born in the first half 2019, which would be 100,000 fewer than the same period last year.

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.

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.

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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 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.

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.”