WLI

Cash fed cattle trade opened on Wednesday with the weekly Fed Cattle Exchange auction sale.

About half of the 2,648 head offered ended up trading hands. Most of those were at a weighted average price of $132.54/cwt. for delivery at 1-9 days. That’s 2.62 less than last week. Cattle selling for delivery at 1-17 days and 10-17 days brought a weighted average of $132.50.

Country trade was limited on light demand through the afternoon.

Even though it was expected, the softer cash trade helped apply strong pressure to Cattle futures, although they pulled back from the severe downturn seen earlier in the session.

Live Cattle futures closed an average of 90¢ lower with a range of 35¢ to $1.40 lower.

Except for 25¢ lower in spot May, Feeder Cattle futures closed an average of $2.13 lower with a range of $1.32 to $2.85 lower.

Corn futures closed fractionally higher to 2¢ higher.

Choice boxed beef cutout value was 34¢ higher Wednesday afternoon at $246.08. Select was $1.57 lower at $219.60.

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Major U.S. financial indices closed higher on Wednesday. According to some, one of the drivers was release of the minutes from the Federal Reserve earlier this month, which provides some insight on how they plan to go about unwinding the massive balance sheet built through the quantitative easing program. Presumably, investors view the plan as market friendly overall.

The Dow Jones Industrial Average closed 74 points higher. The S&P 500 closed 5 points higher. The NASDAQ closed 24 points higher.

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Analysts with Allendale, Inc. expect Friday’s monthly Cattle on Feed report to show April placements 4.6% higher year over year. According to those analysts, that would be the largest April placement in six years. They add that their estimate is based on their belief that Cattle feeders responded to the rally in fed cattle prices from the end of March to the end of April by placing more cattle. They also point out that April placements supply the October through January slaughter period.

Cattle futures settled lower on Tuesday amid a session with little conviction one way or the other. Part of it could be traders waiting for information yet to come this week, including development of cash fed cattle trade, along with positioning ahead of Friday’s monthly Cattle on Feed report, as well as the looming Holiday weekend.

Live Cattle futures closed an average of 36¢ lower for a range of 7¢ to 85¢ lower, except for unchanged at the back.

Except for unchanged in spot May and $1.15 higher at the back of the Board, Feeder Cattle futures closed an average of 79¢ lower with a range of 32¢ to $1.27 lower.

Corn futures closed 2¢-5¢ lower.

Cash fed cattle trade was at a standstill in all major cattle feeding regions. Choice boxed beef cutout value was $2.14 lower Tuesday afternoon at $245.74. Select was $1.66 lower at $221.17.

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Major U.S. financial indices closed a touch higher on Tuesday, as investors await minutes from the Federal Reserve meeting this week. The Dow Jones Industrial Average closed 43 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 5 points higher.

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Depending on expectations, the monthly USDA Cold Storage report this week was neutral to either side of a non-factor.

Total pounds of beef in freezers on Apr. 30 were down 1% from the previous month and down 2% from last year. Frozen pork supplies were up 9% from the previous month but down 6% from last year. Combined, total red meat supplies in freezers were up 4% from the previous month but down 4% from last year.

Higher outside markets and stronger commodity prices on Monday helped Cattle futures build on gains from the end of last week.

After 47¢ higher in spot Jun, Live Cattle futures closed an average of $1.34 higher with a range of 95¢ to $1.72 higher.

Other than 90¢ and $1.22 higher at either end of the Board, Feeder Cattle futures closed an average of $2.48 higher.

Corn futures closed mostly 1¢-2¢ higher.

Choice boxed beef cutout value was 74¢ higher Monday afternoon at $247.88. Select was $1.41 higher at $222.83.

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Major U.S. financial indices closed higher on Monday, supported by the billion-dollar arms deal between the U.S. and Saudi Arabia.

The Dow Jones Industrial Average closed 89 points higher. The S&P 500 closed 12 points higher. The NASDAQ closed 49 points higher.

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“The percent of the U.S. without any dry or drought conditions in May exceeded 80% for the first time since the Drought Monitor began publication in 2000,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. He adds that no exceptional drought conditions exist anywhere in the country, for the first time since early in 2011.

Georgia and Florida are the states currently having the toughest time with drought. With that exception, Peel says, “The U.S. has very favorable conditions for pasture, range and hay so far this year. That will help support cattle production and hold production costs down for cattle producers.”

Cash fed cattle prices may have reached their seasonal peak a couple of weeks ago, and volatile cattle futures have applied some pressure to calf prices along the way, but by the end of last week, Cattle futures stabilized and gained a notch while still-strong feeder cattle prices bounced higher.

Live Cattle futures closed an average of 83¢ higher on Monday with a range of 52¢ to $1.40 higher.

Feeder Cattle futures closed an average of $1.01 higher with a range of 87¢ to $1.10 higher.

Corn futures closed mostly 4¢-6¢ higher.

The continuation of feedlot currentness and the resulting lighter carcass weights are certainly helping to underpin the market. Choice boxed beef cutout value was 7¢ lower Friday afternoon at $247.14/cwt. Select was 24¢ lower at $221.42.

“Perhaps feedlot operators might still have the upper hand, despite lower cash fed cattle trade as packers still need inventory,” said AMS analysts on Friday.

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Major U.S. financial indices continued to rebound from the mid-week slide.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 16 points higher. The NASDAQ closed 28 points higher.

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“Retailers and food service providers are trying to stock up on Choice grade middle meats as steaks begin to sizzle on the grill,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Much of the interest in middle meats is brought on by Memorial Day weekend which marks the unofficial start of summer. The interest in Choice grade middle meats has swollen the Choice-Select spread to what will likely be a record weekly level and the highest Choice-Select spread since June 2016.”

Cash fed cattle trade was $4-$5 lower in the Southern Plains on Thursday at $133-$134/cwt. on a live basis. There were too few transactions to trend in other regions.

Choice boxed beef cutout value was 96¢ lower Thursday afternoon at $247.21/cwt. Select was 27¢ lower at $221.66.

Despite the lower cash trade and softer wholesale beef values, following early pressure, the reported increase in commercial interest helped buoy Cattle futures, adding to gains from the previous session.

Except for a nickel lower in Dec and Jun, Live Cattle futures closed an average of 38¢ higher across a range of 5¢ to 82¢ higher.

Except for 30¢ higher in spot May, Feeder Cattle futures closed an average of $1.28 higher with a range of $1.02 to $1.62 higher.

Corn bids were mostly 5¢-6¢ lower.

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Major U.S. financial indices rebounded some from the previous session’s sell-off.

The Dow Jones Industrial Average closed 56 points higher. The S&P 500 closed 8 points higher. The NASDAQ closed 43 points higher.

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“Feeder cattle prices are up 12-14% since the beginning of the year, Peel says, while fed cattle and Choice boxed beef prices are up about 23%. Select boxed beef is up about 16%,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Peel notes that lighter carcass weights helped push the spring price rally higher and for longer than expected.

“Beef production is up 4.3% so far this year, while total cattle slaughter is up over 6% for the year to date,” Peel says. “In the most recent week of actual slaughter data, he says steer carcass weights were down 21 lbs. from one year ago, while heifer carcass weights were down 18 lbs. He adds that This is partially offset by heavier cow and bull carcass weights at the current time.”

Cattle futures found some stability on Wednesday, despite lower wholesale beef values and softer prices at the weekly Fed Cattle Exchange auction. The weighted average price there was $135.16/cwt. for delivery at 1-9 days; $134.28 for delivery at 1-17 days; $130.84 for delivery at 17-30 days. Of the 2,379 head offered, 1,621 head sold.

Live Cattle futures closed an average of 23¢ higher.

After $1.02 higher in spot May, Feeder Cattle futures closed an average of 23¢ higher.

Corn futures 2¢-3¢ higher.

Choice boxed beef cutout value was $1.71 lower Wednesday afternoon at $248.17/cwt. Select was $2.46 lower at $221.93. On both counts, perhaps this marks the front end of the expected seasonal downturn. In the meantime, The Choice-Select spread continued to widen yesterday to $26.24.

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Major U.S. financial indices closed sharply lower on Wednesday. The popular reason, according to various analysts, was the potential for presidential impeachment, what with the firing of the FBI Director, etc., which would presumably derail some of the reforms Wall Street has been pricing into the market; lots of presumptions on both counts.  

The Dow Jones Industrial Average closed 372 points lower. The S&P 500 closed 43 points lower. The NASDAQ was down 156 points.

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After trending lower year to year through the first quarter, the daily average Choice-Select spread is moving higher, substantially higher so far this month. The seasonal trend is no surprise, but the degree of climb in recent weeks is atypical, speaking to more cattle with fewer days on feed and lighter carcass weights as consumers place more value on higher quality.

For perspective, the monthly daily average Choice-Select spread in the first quarter of this year ranged from $2.22 to $7.08/cwt., compared to a range of $4.18 to $5.90 through the first quarter of last year. The spread was $2.54 higher this April than last at $11.97. For May, Through the 16th, the average daily spread was $9.26 higher than last year at $19.84.

Cattle futures continued lower on Tuesday, led by Feeder Cattle, although they closed off of session lows.

Live Cattle futures closed an average of 47¢ lower.

Feeder Cattle futures closed an average of $1.27 lower (92¢ to $1.57 lower).

Corn futures closed mostly fractionally mixed.

Choice boxed beef cutout value was 48¢ higher Tuesday afternoon at $249.88. Select was $1.11 lower at $224.39. The Choice-Select spread widened to a massive $25.49 as consumers focus on middle meats, while greener cattle make their way to market.

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Major U.S. financial indices closed little changed on Tuesday.

The Dow Jones Industrial Average closed 2 points lower. The S&P 500 closed 1 point lower. The NASDAQ closed 20 points higher.

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“Expectations are that prices (fed cattle) will remain relatively strong, despite declining from recent peaks, as packers maintain relatively high rates of cattle slaughter to mitigate the effects of lower carcass weights,” according to analysts with USDA’s Economic Research Service, in the latest monthly Livestock, Dairy and Poultry Outlook. “Demand for market-ready cattle boosted the 5-Area Direct steer price in April to $131.31/cwt., well above the first-quarter estimate of $122.96.”

For further perspective, the second-quarter price is projected at $127-$133, reflecting the strong prices through early May.

Any jolt from the late-week announcement regarding beef trade with China evaporated on Monday as Cattle futures opened and closed sharply lower, with many anticipating another step-down in fed cattle prices this week.

You’ll recall that fed cattle prices were $7 lower in the Southern Plains last week and $7-$9 lower in Nebraska… mostly $138/cwt. in those regions on a live basis. At $220 in the beef, dressed prices in Nebraska were $10 lower.

Live Cattle futures closed an average of $2.18 lower on Monday with a range of $1.55 to $2.97 lower.

Feeder Cattle futures closed an average of $2.64 lower with a range of $1.35 to $3.37 lower. On both counts, that continues the start-and-stop unwinding from last week.

Corn futures closed 1¢ to 3¢ lower.

Choice boxed beef cutout value was $1.71 higher Monday afternoon at $249.40. Select was a penny lower at $225.50. The Choice-Select spread continued to widen at $23.90.

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Rising oil prices and tech stocks helped lead Major U.S. financial indices higher on Monday.

The Dow Jones Industrial Average closed 85 points higher. The S&P 500 closed 11 points higher. The NASDAQ closed 28 points higher.

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Derrell Peel, Extension livestock marketing specialist at Oklahoma State University lends some perspective to the spring-long rally in cattle prices.

In his weekly market comments, Peel points out the rally pushed prices higher and extended for longer most anyone expected. According to Peel, market support stems from a range of factors, including: tighter than expected supplies of beef; stronger than expected domestic demand; continued strong beef exports; and speculative support in live and feeder cattle futures contracts.

Despite the crumbling cattle futures, lower cash fed cattle prices and pressure on calf and feeder markets that dominated most of last week, it all ended on a high note, helped along by the news that China is supposed to open its doors to U.S. beef exports by July 16 this year.

The emotional boost from the Chinese news added to short covering and profit taking to help Cattle futures soar sharply higher on Friday.

Live Cattle futures closed an average of $2.18 higher for a range of $1.25 to $2.47 higher.

Feeder Cattle futures closed an average of $3.66 higher ($2.17 to limit-up $4.50 higher).

Corn futures closed mostly 1¢ higher.

Choice boxed beef cutout value was 83¢ higher Friday afternoon at $247.69. Select was $1.15 lower at $225.51. The Choice-Select spread was the highest since last June at $22.18.Corn futures closed mostly 1¢ higher.

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Major U.S. financial indices closed marginally mixed on Friday, pressured by sliding retailer stocks and slower overall retail sales.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 3 points lower. The NASDAQ closed 5 points higher.

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The Trump Administration announced late last Thursday that China agreed to open its doors to U.S. beef exports no later that July 16 of this year, after 13 years of being locked out, at least officially. It seems a poorly kept secret that some U.S. beef has continued to make its way into the country via other nations.

There’s still another round of technical consultations, to go according to the U.S. Meat Export Federation and others. Even with the market open, only time will tell how much U.S. beef the Chinese are interested in buying. But the hard date of July 16 sure makes this seem real rather than more wishful chatter.

On Friday, USDA Secretary of Agriculture, Sonny Perdue said, “This is tremendous news for the American beef industry, the agriculture community, and the U.S. economy in general…“We will once again have access to the enormous Chinese market, with a strong and growing middle class, which had been closed to our ranchers for a long, long time.”

Cash fed cattle sales in Nebraska on Thursday mirrored the sharply lower prices that ended the previous day in the Southern Plains. Live prices in Nebraska were mostly $7-$9 lower than last week at mostly $138. Although too few to trend, a few dressed sales sold $10 less than last week at $220. Live trade in the Southern Plains on Wednesday was mostly $7 lower than last week at mostly $138.

Futures traders continued to unwind positions on Thursday amid heightened uncertainty wrought by the recent volatility.

Live Cattle futures closed an average of 62¢ lower.

Feeder Cattle futures closed an average of $1.70 lower.

Corn futures closed 2¢-4¢ lower.

Choice boxed beef cutout value was $2.28 higher Thursday afternoon at $246.86. Select was $2.04 higher at $226.66.

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Major U.S. financial indices closed slightly lower on Thursday, pressured by sliding performance from some of the larger retailers. The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 5 points lower. The NASDAQ closed 13 points lower.

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“Volatility is higher when compared to the last several months, but is still reasonable when compared to historical levels,” says Brian Williams, a livestock economist at Mississippi State University, in the most recent issue of In the Cattle Markets. He explains that volatility of the nearby Feeder Cattle contract hovered in the 10-20% range for much of this year, which he says is less than the volatility seen over the past few years.

“In 2016, Williams says volatility dipped below 15% for only a couple of weeks in the spring and was above 20% for much of the second half of the year. “As 2015 came to a close, Williams explains volatility topped 30%. As for today…At 28%, volatility is now at its highest level since the close of 2015 and the first week of 2016.”