Weekly Market Highlights

Cattle Current Weekly Highlights—Week ending Nov. 29, 2019

Although trends were tougher to come by during the holiday-shortened week, those available suggest optimism. Tyson’s plan to resume operations at its Kansas plant also adds support heading into the new week.

There were just 84,600 head of calves and feeder cattle offered at auction, direct and via video or Internet sales, according to the Agricultural Marketing Service (AMS), so no nationwide trend.

Feeder Cattle futures surged higher, though, basically erasing losses from the previous week. They closed an average of $3.79 higher week to week on Friday. Turned out, traders viewed the 2% fewer October placements (Cattle on Feed report) as positive. Ongoing gains in cash fed cattle prices also provided support.

Negotiated cash fed cattle trade for the week was mainly $2-$3 higher on a live basis at $118/cwt. in Kansas, $118-$120 in Nebraska and $117-$118 in the western Corn Belt. Dressed trade was $3 higher at $187.

Other than unchanged in spot Dec, Live Cattle futures closed an average of $2.36 higher week to week on Friday.

“Annual average feedlot inventories (12-month moving average) peaked in August but there is a chance that strong placements in the next few months could push to a higher average total,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In other words, feedlot inventories are close but may not yet be quite at a cyclical peak.”

Choice boxed beef cutout value was 45¢ lower week to week on Friday at $232.12/cwt. Select was 98¢ lower at $210.34.

The average dressed steer weight for cattle harvested the week ending Nov. 16 was 912 lbs., according to USDA’s weekly Actual Slaughter Under Federal Inspection report. That was 4 lbs. heavier than the previous week and 12 lbs. heavier than the previous year. The average dressed heifer weight of 841 lbs. was 2 lbs. heavier than the prior week and 5 lbs. heavier than the previous year.

“Large supplies of red meat are prevalent in the marketplace, as total weekly meat production and weekly hog slaughter set new records for week ending Nov. 16,” say AMS analysts.

Friday to Friday Change*

Weekly Auction Receipts

 

Nov. 29 Auction Direct

Video/net

Total
 

58,600

(-265,300)

25,900

(-14,800)

100

(-20,900)

84,600

(-301,000)

 

CME Feeder Index

CME Feeder Index* Nov. 28 Change
  $145.11 –  $0.36

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

Week ending Nov. 22

North Central

Steers-Cash Nov. 22 Change
600-700 lbs. $150.37 –  $1.71
700-800 lbs. $147.78 –  $2.30
800-900 lbs. $146.44 –  $3.45

Week ending Nov. 22

South Central

Steers-Cash Nov. 22 Change
500-600 lbs. $151.38 –  $1.89
600-700 lbs. $144.41 –  $2.14
700-800 lbs. $144.62 –  $2.49

Week ending Nov. 22

Southeast

Steers-Cash Nov. 22 Change
400-500 lbs. $144.30 –  $0.30
500-600 lbs. $135.22 –  $0.36
600-700 lbs. $131.04 + $0.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 29 ($/cwt) Change
Choice $232.12 –  $0.45
Select $210.34 –  $0.98
Ch-Se Spread $21.78 + $0.53

 

Futures

Feeder Cattle  Nov. 29 Change
Jan ’20 $142.275 + $3.000
Mar $143.025 + $3.425
Apr $144.975 + $3.875
May $146.150 + $4.125
Aug $151.025 + $4.125
Sep $151.650 + $4.150
Oct $151.300 + $4.175
Nov $150.625 + $3.475

 

Live Cattle   Nov. 29 Change
Dec $118.675      -0-
Feb ’20 $126.200 +$2.350
Apr $126.375 +$2.200
Jun $117.725 +$2.400
Aug $115.350 +$2.325
Oct $116.725 +$2.375
Dec $119.100 +$2.650
Feb ’21 $120.550 +$2.300
Apr $121.400 +$2.300

 

Corn futures Nov. 29 Change
Dec $3.712 +$0.026
Mar ’20 $3.812 +$0.028
May $3.856 +$0.020
Jul $3.902 +$0.016
Sep $3.880 – $0.004
Dec $3.910 – $0.014

 

Oil CME-WTI Nov. 29 Change
Jan ’20 $55.17 –  $2.60
Feb $55.14 –  $2.52
Mar $54.98 –  $2.37
Apr $54.74 –  $2.24
May $54.45 –  $2.12
Jun $54.10 –  $2.02

 

Equities

Equity Indexes Nov. 29 Change
Dow Industrial Average  28051.41 +175.79
NASDAQ   8665.47 +145.59
S&P 500   3140.98 +  29.99
Dollar (DXY)        98.27      -0-
Cattle Current Weekly Highlights—Week ending Nov. 29, 2019 2019-11-30T17:49:27-06:00

Cattle Current Weekly Highlights—Week ending Nov. 22, 2019

Wobbly Feeder Cattle futures and the sheer number of calves crossing the auction block ahead of Thanksgiving helped pressure calf and feeder cattle prices last week, despite renewed farmer-feeder interest in the north.

Nationwide, steers and heifers traded steady to $3 lower, according to the Agricultural Marketing Service (AMS). Those analysts point out weaned calves with good condition continue to sell at premium to un-weaned, fleshy peers.

Feeder Cattle futures closed an average $4.08 lower week to week on Friday. Most of that came Friday, amid pessimism ahead of the monthly Cattle on Feed report.

As widely expected, feedlot placements in October were significantly higher—up 10.19% more (+299,000 head) compared to last year at 2.48 million head. That was still 2% less than consensus projections ahead of the report. It’s also worth keeping in mind that placements the previous October were slacker due to early calf marketing borne by regional drought.

Feedlot marketings in October of 1.88 million head were 0.64% less (-12,000 head), which was in line with expectations.

As of Nov. 1, there were 11.83 million head on feed, which was 1.19% more (+139,000 head) than the previous year.

Fed Cattle Prices Grind Higher

Negotiated cash fed cattle trade last week was mainly $1 higher on a live basis at $116/cwt. in the Southern Plains and at $115-$117 up north. Dressed trade was $2 higher at $184.

Tyson Fresh Meats—the beef and pork subsidiary of Tyson Foods, Inc.—announced Monday that efforts to resume harvest operations at its Holcombe, KS beef plant will begin the first week of December, with intentions to be fully operational by the first week of January. It plans to resume receiving cattle at the facility the first week of December.

After 42¢ lower in spot Dec, Live Cattle futures closed an average of $1.67 lower week to week on Friday.

Choice boxed beef cutout value was $8.23 lower week to week on Friday at $232.57/cwt. Select was $3.01 lower at $211.32.

“The largest portion of holiday beef buying is coming to an end just prior to the Thanksgiving holiday. The market will likely decline further with the short week of trading next week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, there is likely to be some frenzied beef buying in the weeks leading up to Christmas, as some will realize they are short bought and need a little more inventory to meet consumers’ demand. Thus, beef cutout prices will be well supported through the end of the year. With the change in the calendar year, cutout prices are expected to soften as beef demand seasonally softens during the winter months and as consumers focus more on end meats instead of middle meats.”

Beef price support from U.S. beef exports is a wild card heading into 2020, but appears poised to strengthen, due in part to the global animal protein deficit cleaved by African Swine Fever.

“While beef exports (U.S.) are likely to end 2019 with an almost 2% decline, shipments are expected to rebound in 2020 by about 7%, as drought in competitor Australia reduces its exportable supply at the same time as beef demand continues to expand in Asia,” say analysts with USDA’s Economic Research Service (ERS), in the November Livestock, Dairy and Poultry Outlook.

In the meantime, Griffith explains slaughter cow and bull prices are churning against typical seasonal pressure as 90% lean beef prices continue to soar.

“Cow slaughter, which is the primary source of 90% lean manufacturing beef, in 2019, is about 163,000 head higher than the same time period in 2018. One would think that increased production would result in lower prices, but there are more factors at play,” Griffith explains. “Australia is generally the largest import source of such beef to the United States, but high prices on Australian beef have tempered imports of lean manufacturing beef. Australia is sending considerable quantities of manufacturing beef to China, which is searching for meat protein to make up for the decline in pork production. This same situation has bolstered fresh 50% lean beef, which is sourced from trimmings of finished cattle. This has added some value to finished cattle, which should make its way down the production line.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 22

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

323,900

(+24,900)

40,700

(-10,500)

21,000

(+17,000)

385,600

(+31,400)

 

CME Feeder Index

CME Feeder Index* Nov. 21 Change
  $145.47 –  $1.65

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 22 Change
600-700 lbs. $150.37 –  $1.71
700-800 lbs. $147.78 –  $2.30
800-900 lbs. $146.44 –  $3.45

 

South Central

Steers-Cash Nov. 22 Change
500-600 lbs. $151.38 –  $1.89
600-700 lbs. $144.41 –  $2.14
700-800 lbs. $144.62 –  $2.49

 

Southeast

Steers-Cash Nov. 22 Change
400-500 lbs. $144.30 –  $0.30
500-600 lbs. $135.22 –  $0.36
600-700 lbs. $131.04 + $0.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 22 ($/cwt) Change
Choice $232.57 –  $8.23
Select $211.32 –  $3.01
Ch-Se Spread $21.25 –  $5.22

 

Futures

Feeder Cattle  Nov. 22 Change
Jan ’20 $139.275 –  $5.000
Mar $139.600 –  $4.625
Apr $141.100 –  $4.350
May $142.025 –  $4.050
Aug $146.900 –  $3.575
Sep $147.500 –  $3.350
Oct $147.125 –  $3.600
Nov $147.150 n/a

 

Live Cattle   Nov. 22 Change
Dec $118.675 – $0.425
Feb ’20 $123.850 – $1.125
Apr $124.175 – $1.900
Jun $115.325 – $2.275
Aug $113.025 – $2.075
Oct $114.350 – $1.600
Dec $116.450 – $1.575
Feb ’21 $118.250 – $1.425
Apr $119.100 – $1.425

 

Corn futures Nov. 22 Change
Dec $3.686 – $0.026
Mar ’20 $3.784 – $0.022
May $3.836 – $0.028
Jul $3.886 – $0.038
Sep $3.884 – $0.026
Dec $3.924 – $0.032

 

Oil CME-WTI Nov. 22 Change
Jan ’20 $57.77 –  $0.06
Feb $57.66 –  $0.03
Mar $57.35 –  $0.02
Apr $56.98 -0-
May $56.57 -0-
Jun $56.12 –  $0.01

 

Equities

Equity Indexes Nov. 22 Change
Dow Industrial Average  27875.62 – 128.87
NASDAQ   8519.88 –   20.95
S&P 500   3110.93 –      9.53
Dollar (DXY)        98.27 +      0.27
Cattle Current Weekly Highlights—Week ending Nov. 22, 2019 2019-11-24T13:12:34-06:00

Cattle Current Weekly Highlights—Week ending Nov. 15, 2019

Firm negotiated cash fed cattle trade and wholesale beef values continued to help bolster calf and feeder cattle prices last week, while futures prices softened slightly.

Steers and heifer sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Auction receipts were somewhat tempered this week with early-week sales dealing with severely cold temperatures and frozen precipitation making travel hazardous from Missouri up through the Northern Plains and into the Upper Midwest,” say AMS analysts. “Most buyers at auctions were order buyers, as the true farmer-feeder is still in the combine trying to get the late crop out before adverse weather stops them. With large sales of calves across the nation, buyers are spread out and some sales felt the effects of light buyer attendance.”

Feeder Cattle futures closed an average $1.30 lower week to week on Friday. That included a mid-week average decline of $3.13.

“The sharp losses in the Feeder Cattle contracts found fund managers rolling to the January contract and beyond,” explain AMS analysts.

Rather than the beginning of a correction, one could argue retrenchment ahead of what looks to be a higher trending market.

Andrew P. Griffith, agricultural economist at the University of Tennessee suggests producers with spring-born calves left to sell may be rewarded if they wait a little longer.

“There is a good chance the price increase from today until the middle of January will exceed any negative tax implications,” Griffith says, in his weekly market comments. “For stocker producers, continue buying cattle at low prices because the payout in four or five months looks advantageous.”

Cash Fed Cattle Maintain Recent Gains

Negotiated cash fed cattle trade ended the week mainly steady to $1 higher at $115/cwt. on a live basis and at $182 in the beef, based on USDA reports.

According to AMS, cattle slaughter under federal inspection last week was estimated at 657,000, which would be 6,000 more than the previous week and 9,000 more than a year earlier.

Live Cattle futures closed an average of 51¢ lower week to week on Friday (2¢ to 90¢ lower).

Choice boxed beef cutout value was $1.68 higher week to week on Friday at $240.80/cwt. Select was $1.07 higher at $214.33.

During a Tuesday conference call to share the company’s fourth-quarter fiscal results, Noel White, Tyson CEO said the company expects to have its southwest Kansas plant—shuttered by the Aug. 9 fire—fully operational within 60 days, and potentially sooner.

“There is a good possibility that some portion of finished cattle will trade as high as $120 before the end of the year if the current trend holds, which will further support prices within the cattle complex,” Griffith says. “The support for finished cattle prices may be stemming from the thought that there are not as many cattle out in the country as was first thought. If this is truly the case, then finished cattle prices will be well supported in the spring with a target price exceeding $130.”

Wonderments about the number of cattle relative to previous estimates have to do with cattle slaughter.

Through Nov. 2, total cattle slaughter was a little more than 1% more than the same period last year, according to AMS.

“Heifer slaughter is over 7% greater than a year ago, while steer slaughter is nearly 3% below a year ago. Year-to-date cow slaughter is nearly 3% higher than a year ago, as well,” explain AMS analysts. “With these data points brought to the forefront, there is no doubt that the cattle herd has got to be contracting at this point. High costs of production in the cow-calf sector have got to be a factor in this pullback. Also, cow-calf producers nationwide are getting older. Some have the winter of 2018-2019 fresh in their minds and are not wanting to take on Old Man Winter again. There have already been auctions advertising herd liquidations in the Plains states before the end of the year.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 15

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

299,000

(-61,400)

51,200

(+1,600)

4,000

(-19,900)

354,200

(-79,700)

 

CME Feeder Index

CME Feeder Index* Nov. 14 Change
  $147.12 +  $1.28

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 15 Change
600-700 lbs. $152.08 + $1.65
700-800 lbs. $150.08 + $0.96
800-900 lbs. $149.89 + $2.17

 

South Central

Steers-Cash Nov. 15 Change
500-600 lbs. $153.27 + $0.80
600-700 lbs. $146.55 + $0.34
700-800 lbs. $147.11 + $1.16

 

Southeast

Steers-Cash Nov. 15 Change
400-500 lbs. $144.60 + $0.19
500-600 lbs. $135.58 –  $0.48
600-700 lbs. $130.96 –  $0.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 15 ($/cwt) Change
Choice $240.80 + $1.69
Select $214.33 + $1.07
Ch-Se Spread $26.47 + $0.61

 

Futures

Feeder Cattle  Nov. 15 Change
Nov $146.250 –  $0.750
Jan ’20 $144.275 –  $1.600
Mar $144.225 –  $1.275
Apr $145.450 –  $1.375
May $146.075 –  $1.275
Aug $150.475 –  $1.375
Sep $150.850 –  $1.375
Oct $150.725 –  $1.350

 

Live Cattle   Nov. 15 Change
Dec $119.100 – $0.150
Feb ’20 $124.975 – $0.050
Apr $126.075 – $0.025
Jun $117.600 – $0.675
Aug $115.100 – $0.675
Oct $115.950 – $0.900
Dec $118.025 – $0.700
Feb ’21 $119.675 – $0.750
Apr $120.525 – $0.700

 

Corn futures Nov. 15 Change
Dec $3.712 – $0.060
Mar ’20 $3.806 – $0.058
May $3.864 – $0.070
Jul $3.924 – $0.072
Sep $3.910 – $0.052
Dec $3.956 – $0.054

 

Oil CME-WTI Nov. 15 Change
Dec $57.72 + $0.48
Jan ’20 $57.83 + $057
Feb $57.69 + $0.59
Mar $57.37 + $0.60
Apr $56.98 + $0.58
May $56.57 + $0.58

 

Equities

Equity Indexes Nov. 15 Change
Dow Industrial Average  28004.98 + 323.25
NASDAQ   8540.83 +    65.52
S&P 500   3120.46 +     27.38
Dollar (DXY)        98.00 –        0.40
Cattle Current Weekly Highlights—Week ending Nov. 15, 2019 2019-11-17T16:17:49-06:00

Cattle Current Weekly Highlights—Week ending Nov. 8, 2019

Cash calf and feeder cattle prices mostly held their own or churned higher last week, as receipts increased and more farmer feeder were able to enter the market.

Steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). That was with the second heaviest auction volume of the year at 360,400 head.

Other than $2.12 and 12¢ lower in the front two contracts, Feeder Cattle futures closed an average 36¢ higher week to week on Friday.

“Discounts continue to be applied to calves with short or no weaning programs, but they are not nearly as severe as what was being applied a month ago,” say AMS analysts. “Colder weather is helping to straighten calves out and making them a little less risky to own.”

As well, late harvest, weather, and truck availability continue to be issues in various parts of the country.

“Demand for lightweight calves in Montana was reduced by dry conditions on the West Coast,” explain AMS analysts. “Transportation issues in the Northern Plains tightened demand late in the week, due to limited truck availability. It’s farming time in the Northern Plains and farmers need those trucks hooked to their grain trailers. Farmer feeders are still working on corn harvest in the Northern Plains, which is going slow as corn is wet and must be dried. This is keeping some of these buyers out of the market on calves, as they simply don’t have the time to take on a bawling calf.” They add that propane rationing in the Upper Midwest and Eastern Corn Belt, could further delay harvest completion.

With all of that said, Andrew P. Griffith, agricultural economist at the University of Tennessee notes in his weekly market comments that value of gain is currently offering opportunity to add weight to calves.

“With the assumption of buying 425-575 lb. steers in November and carrying those calves for 150 days ,with an average daily gain of 2 lbs./day, the expected value of gain ranges from $1.42 to $1.54/lb., Griffith explains, in his weekly market comments. “There is no guarantee in the stated value of gain if no form of price risk management is used. Thus, to increase the probability of successfully reaching the stated value of gain, one would have to sell a futures contract or do something similar to successfully capture this value. There is a strong potential for profit in what the market is currently offering, but this profit potential will change as the market changes, which means producers can either speculate that the market will stay the same or go higher or they can hedge their bets and capture the value being offered today.”

Cash fed cattle prices grind higher

Negotiated cash fed cattle trade ended the week at $114-$115/cwt. in the Southern Plains, which was mainly $2 higher in Kansas and $2-$3 higher in the Texas Panhandle. In Nebraska, live trade was unevenly steady at $114-$116. Prices in the western Corn Belt were $1-$2 higher at $114-$115. Dressed trade was $1-$2 higher at $181-$182.

Other than 27¢ lower in spot Dec and unchanged in away Dec, Live Cattle futures closed an average of 62¢ higher week to week on Friday.

“The finished cattle market is trading $14 higher than its fall low, on a live basis, which occurred eight weeks ago,” Griffith says. “Live cattle futures are pricing in further gains before the end of the year, which could mean a 20% price improvement from the fall lows. Beyond the end of the year, and pushing into the spring of 2020, Live Cattle futures are predicting finished cattle to reach $126/cwt. The current expectation for April is about $3 lower than the highest single week average in the spring of 2019, which may be disappointing to some. However, there is a good possibility of live cattle experiencing a single weekly average in 2020 that meets or exceeds $130.”

AMS analysts point out increasing boxed beef values and strong packer margins continue to support fed cattle prices, while providing incentive for packers to keep running plants hard.

Choice boxed beef cutout value was $5.92 higher week to week on Friday at $239.12/cwt. Select was $5.75 higher at $213.26.

Beef Exports Remain Strong

U.S. beef exports in September were steady with last year in volume at 109,799 metric tons (mt), but value was 4% less at $661.3 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Through the first three quarters of the year, beef exports were 2% below last year’s record pace in both volume (991,325 mt) and value ($6.1 billion).

“While red meat exports face obstacles in some key markets, global demand dynamics are strong and we see opportunities for significant growth in the fourth quarter and into 2020,” says USMEF President and CEO Dan Halstrom. “Progress is being made on market access improvements and this makes for a very positive outlook going forward.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 8

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

360,400

(+85,800)

49,600

(+600)

23,900

(+21,900)

433,900

(+108,300)

 

CME Feeder Index

CME Feeder Index* Nov. 7 Change
  $145.84 –   $0.14

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 8 Change
600-700 lbs. $150.43 –  $1.42
700-800 lbs. $149.12 –  $0.97
800-900 lbs. $147.72 –  $2.35

 

South Central

Steers-Cash Nov. 8 Change
500-600 lbs. $152.47 + $3.06
600-700 lbs. $146.21 + $3.48
700-800 lbs. $145.95 + $1.49

 

Southeast

Steers-Cash Nov. 8 Change
400-500 lbs. $144.41 + $5.46
500-600 lbs. $136.06 + $3.74
600-700 lbs. $131.11 + $1.73

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 8 ($/cwt) Change
Choice $239.12 + $5.92
Select $213.26 + $5.75
Ch-Se Spread $25.86 + $0.17

 

Futures

Feeder Cattle  Nov. 8 Change
Nov $147.000 –  $2.125
Jan ’20 $145.875 –  $0.125
Mar $145.500 + $0.375
Apr $146.825 + $0.425
May $147.350 + $0.175
Aug $151.850 + $0.150
Sep $152.225 + $0.275
Oct $152.075 + $0.750

 

Live Cattle   Nov. 8 Change
Dec $119.250 – $0.275
Feb ’20 $125.025 +$0.800
Apr $126.100 +$0.650
Jun $118.275 +$0.525
Aug $115.775 +$0.475
Oct $116.850 +$0.575
Dec $118.725 -0-
Feb ’21 $120.425 +$0.350
Apr $121.225 +$0.950

 

Corn futures Nov. 8 Change
Dec $3.772 – $0.120
Mar ’20 $3.864 – $0.120
May $3.934 – $0.110
Jul $3.996 – $0.104
Sep $3.962 – $0.062
Dec $4.010 – $0.046

 

Oil CME-WTI Nov. 8 Change
Dec $57.24 + $1.04
Jan ’20 $57.26 + $0.99
Feb $57.10 + $0.95
Mar $56.77 + $0.91
Apr $56.40 + $0.56
May $55.99 + $0.79

 

Equities

Equity Indexes Nov. 8 Change
Dow Industrial Average  27681.24 + 333.88
NASDAQ   8475.31 +    88.91
S&P 500   3093.08 +     26.17
Dollar (DXY)        98.40 +       1.28
Cattle Current Weekly Highlights—Week ending Nov. 8, 2019 2019-11-10T15:20:51-06:00

Cattle Current Weekly Highlights—Week ending Nov. 1, 2019

Stronger futures prices helped push cash calf and feeder cattle prices mainly steady to higher.

Yearling steers and heifers sold steady to $3 higher, while calves traded steady to $2 higher, according to the Agricultural Marketing Service (AMS).

“Long-time weaned calves with full rounds of preconditioning vaccinations sold on good demand, creating wide price spreads compared to calves with partial vaccinations,” according to AMS analysts. Between unseasonably cold temperatures and wintry weather in various parts of the country, they note that auction receipts were lighter than normal for the fall run.

Feeder Cattle futures closed an average of $4.22 higher week to week on Friday. The CME Feeder Cattle Index was $1.25 higher week to week on Thursday at $145.98, the highest since April.

“Cattle ready to go on feed have been rejuvenated by stronger live cattle futures, which have spurred feeder cattle futures,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The November feeder cattle contract price has increased more than $8/cwt. since the first day of October, which has resulted in a very similar increase in load-lot cattle being marketed through Tennessee auctions.”

Fed Cattle Prices Gain

Negotiated cash fed cattle trade remained undeveloped in the North through Friday afternoon, based on USDA reports. Although there were too few transactions to trend, a few live sales in the western Corn Belt were at $112-$114/cwt. and a few dressed sales in Nebraska were at $180. Compared to the previous week, that was $2-$4 higher on a live basis and $5 higher in the beef.

Live Cattle futures closed an average of $2.66 higher week to week on Friday.

Griffith points out the December Live Cattle contract is $19 higher than its low Sept. 9.

“Futures prices have live cattle moving higher before the end of the year, with further gains heading into late winter and early spring,” Griffith explains. “The market is beginning to take off, but it is difficult to determine what all is driving this uptick. With little information to support surging prices, now is the time to take advantage of hedging opportunities, especially with the strong premium in futures compared to cash.”

Wholesale beef values continue to sell higher year over year. Choice boxed beef cutout value was $7.76 higher week to week on Friday at $233.20/cwt. Select was $7.67 higher at $207.51.

Choice boxed beef cutout value was $233.20/cwt. Friday, the highest since August—about a week after the Tyson fire. That was $14.65 more (+6.7%) than a year earlier. At $207.52 on Friday, Select was $3.27 more (+1.6%) more. The Choice-Select spread was 79.6% higher (+$11.39) at $25.69.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 1

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

274,600

(-15,600)

49,000

(+15,300)

2,000

(-30,700)

325,600

(-31,000)

 

CME Feeder Index

CME Feeder Index* Oct. 31 Change
  $145.98 +  $1.25

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 1 Change
600-700 lbs. $151.85 + $1.81
700-800 lbs. $150.09 + $2.11
800-900 lbs. $150.07 + $3.28

 

South Central

Steers-Cash Nov. 1 Change
500-600 lbs. $149.41 + $1.29
600-700 lbs. $147.23 + $3.00
700-800 lbs. $144.46 –  $0.34

 

Southeast

Steers-Cash Nov. 1 Change
400-500 lbs. $138.95 –  $0.63
500-600 lbs. $132.32 –  $1.35
600-700 lbs. $129.38 + $0.40

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 1 ($/cwt) Change
Choice $233.20 + $7.76
Select $207.51 + $7.67
Ch-Se Spread $25.69 + $0.09

 

Futures

Feeder Cattle  Nov. 1 Change
Nov $149.125 + $3.750
Jan ’20 $146.000 + $4.400
Mar $145.125 + $4.375
Apr $146.400 + $4.150
May $147.175 + $3.675
Aug $151.700 + $4.175
Sep $151.950 + $5.050
Oct $148.600 n/a

 

Live Cattle   Nov. 1 Change
Dec $119.525 +$3.450
Feb ’20 $124.225 +$3.150
Apr $125.450 +$2.850
Jun $117.750 +$2.875
Aug $115.300 +$2.525
Oct $116.275 +$2.250
Dec $118.725 +$2.200
Feb ’21 $120.075 +$2.000
Apr $120.275 n/a

 

Corn futures Nov. 1 Change
Dec $3.892 +$0.026
Mar ’20 $3.984 +$0.010
May $4.044 +$0.004
Jul $4.100 +$0.004
Sep $4.024 – $0.010
Dec $4.056 – $0.020

 

Oil CME-WTI Nov. 1 Change
Dec $56.20 –  $0.46
Jan ’20 $56.27 –  $0.44
Feb $56.15 –  $0.44
Mar $55.86 –  $0.46
Apr $55.54 –  $0.41
May $55.20 –  $0.35

 

Equities

Equity Indexes Nov. 1 Change
Dow Industrial Average  27346.36 + 389.30
NASDAQ   8386.40 + 143.28
S&P 500    3066.91 +   44.36
Dollar (DXY)        97.12 –      0.71
Cattle Current Weekly Highlights—Week ending Nov. 1, 2019 2019-11-03T11:11:48-06:00

Cattle Current Weekly Highlights—Week ending Oct. 25, 2019

Buyer demand remained strong for yearlings, while colder than normal temperatures in some areas of the county, along with snow and wet conditions, limited demand for un-weaned calves, according to the Agricultural Marketing Service (AMS).

“Potential health risks have kept most buyers at bay for calves. However, preconditioned long-time weaned calves did attract much more of the buyer’s attention, creating wide price spreads,” say AMS analysts. “Moreover, with harvest now in full swing, some farmer feeders are focusing on getting crops out rather than placing calves. With most feedlots at or near full capacity throughout most feeding regions, placing cattle has become challenging as empty pens are already spoken for or getting much needed maintenance work completed.”

Overall, AMS pegged the price trend for yearling steers and heifers at $3/cwt. lower to $1 higher. Steer and heifer calves sold $1-$3 lower.

“Prices for freshly weaned calves may suffer the next several weeks if the total number of head being marketed remains elevated,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The large swings in temperature this time of year result in high-risk cattle if they have not been weaned and vaccinated. The increased risk of morbidity and mortality force cattle buyers to lower their bids to account for the additional veterinary cost and death loss.”

Feeder Cattle futures closed $2.16 higher week to week on Friday, supported by increasing strength in cash fed cattle prices and Live Cattle futures.

Fed Cattle Prices Firm to Higher

Except for the Southern Plains, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports. Live sales in the Southern Plains on Thursday were at $110/cwt., which was $1 higher in Kansas and $2 higher in the Texas Panhandle.

“Negotiated cash fed trade in the Southern Plains provided a psychological victory for cattle feeders with the bulk of sales reported at $110, the highest since the early-August plant fire,” say AMS analysts. “The trend of pursuing high-grading cattle continued throughout all feeding regions with higher live prices reported as the week progressed.”

Live Cattle futures closed an average of $1.70 higher week to week on Friday ($1.40 to $2.45 higher).

“The finished cattle market is attempting to break through price resistance at $110. If there is any follow through next week then it is likely the fed cattle market will officially be out of its fall slump and heading toward better days,” Griffith says. “Live Cattle futures for October traded over $111 on Friday while the December contract traded over $115. The December contract will become the nearby contract next week, which means the market may see some jockeying in the December contract to close some of the $4 gap that currently exists. The better news is the February Live Cattle contract which is trading over $120.”

Seasonally increasing wholesale beef values continued to provide underlying support. Choice boxed beef cutout value was $7.40 higher week to week on Friday at $225.44/cwt. Select was $6.80 higher at $199.84. Over the last two weeks, Choice is up $9.88 and Select is $11.16 higher.

Griffith notes beef cow slaughter is 2.3% more than last year for January through September at 2.30 million head.

“It is difficult to say if these slaughter levels will actually result in reduced beef cowherd size when the Jan. 1 inventory report is released, but these slaughter levels have supported beef production in 2019,” Griffith says. “Despite strong beef production, prices continue to find support due to domestic demand and international demand. This will only be further supported if a deal with China is established.”

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out African Swine Fever (AFS) in China is projected to reduce total global beef, pork and poultry production 1.5% this year, compared to 2018 and another 2.4% next year.

“At the same time, global meat exports are expected to increase 6.9% in 2019 compared to 2018 and to grow another 6.1% in 2020,” Peel explains, in his weekly market comments. “As a result, global meat exports are projected to expand from 11.2% of total production to 13.2% in just two years. ASF is not controlled in most countries where it is currently active; it is difficult to eradicate and restocking is usually unsuccessful if the disease is not completely controlled. The rebuilding of the global pork industry is not a matter of months but will take years. It is clear that ASF will have very significant impacts on global protein markets for the foreseeable future.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 25

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

290,200

(+16,200)

33,700

(-10,300)

32,700

(+30,600)

356,600

(+36,500)

 

CME Feeder Index

CME Feeder Index* Oct. 24 Change
  $144.73 –   $0.87

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 25 Change
600-700 lbs. $150.04 –  $1.41
700-800 lbs. $147.98 –  $1.35
800-900 lbs. $146.79 –  $0.05

 

South Central

Steers-Cash Oct. 25 Change
500-600 lbs. $148.12 –  $1.06
600-700 lbs. $144.23 –  $2.36
700-800 lbs. $144.80 –  $2.90

 

Southeast

Steers-Cash Oct. 25 Change
400-500 lbs. $139.58 –  $0.67
500-600 lbs. $133.67 + $0.69
600-700 lbs. $128.98 –  $2.22

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 25 ($/cwt) Change
Choice $225.44 + $7.40
Select $199.84 + $6.80
Ch-Se Spread $25.60 + $0.60

 

Futures

Feeder Cattle  Oct. 25 Change
Oct $145.700 + $2.200
Nov $145.375 + $2.525
Jan ’20 $141.600 + $2.150
Mar $140.750 + $1.900
Apr $142.250 + $1.925
May $143.500 + $2.350
Aug $147.525 + $2.025
Sep $146.900 + $2.200

 

Live Cattle   Oct. 25 Change
Oct $111.975 +$1.500
Dec $116.075 +$2.450
Feb ’20 $121.075 +$2.000
Apr $122.600 +$1.675
Jun $114.875 +$1.425
Aug $112.775 +$1.375
Oct $114.025 +$1.400
Dec $116.525 +$1.825
Feb ’21 $118.075 +$1.625

 

Corn futures Oct. 25 Change
Dec $3.866 – $0.044
Mar ’20 $3.974 – $0.052
May $4.040 – $0.054
Jul $4.096 – $0.056
Sep $4.034 – $0.030
Dec $4.076 – $0.026

 

Oil CME-WTI Oct. 25 Change
Dec $56.66 + $2.79
Jan ’20 $56.71 + $2.89
Feb $56.59 + $2.97
Mar $56.32 + $2.95
Apr $55.95 + $2.87
May $55.55 + $2.75

 

Equities

Equity Indexes Oct. 25 Change
Dow Industrial Average  26958.06 + 187.25
NASDAQ   8243.12 + 153.58
S&P 500    3022.55 +   36.38
Dollar (DXY)        97.83 +     0.69
Cattle Current Weekly Highlights—Week ending Oct. 25, 2019 2019-10-27T14:26:39-06:00

Cattle Current Weekly Highlights—Week ending Oct. 18, 2019

Drier conditions and recently higher cash prices fostered increased calf and feeder cattle trade in some areas last week. In other areas, continued wet conditions limited receipts and demand.

Yearling steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). Calves traded from $3 lower to $4 higher.

“There was very good demand for yearlings as the supply coming off grass tightens and the cash fed cattle market moves higher,” say AMS analysts. “Bawling calves seem to be finding the most variable demand, very dependent on how much or little health risk buyers view each lot as having…Discounts for those calves without shots or legitimate weaning programs are severe.”

Week to week on Friday, Feeder Cattle closed $1.01 lower through the front three contracts and then 30¢ lower to 37¢ cents higher across the rest of the board.

Although calf prices bucked the seasonal trend in some parts of the country, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions that increased support likely lies at least six weeks into the future. If temperatures and precipitation cooperate, he says calf prices this spring could be 2-3% higher than last year.

Based on USDA reports, negotiated cash fed cattle trade through Friday afternoon was looking most steady to mixed. Live prices in the Southern Plains were steady to $1 lower at $108/cwt. Dressed trade in the North was $1-$3 higher at mostly $173 in the western Corn Belt and at $173-$175 in Nebraska.

Live Cattle futures closed an average of 71¢ higher week to week on Friday (27¢ higher to $1.47 higher in spot Oct).

There was an explosion at Cargill’s Dodge City packing facility this week, in a room adjacent to the main facility. Cattle harvest stopped for the remainder of the week but is expected to be back to full speed by early this week.

Wholesale beef values continued to rebound seasonally. Choice boxed beef cutout value was $2.48 higher week to week on Friday at $218.04/cwt. Select was $4.36 higher at $193.04.

“The domestic supply of meat is extremely strong and all indications are that it will continue to grow. It seems like a stretch to think that the increased production can be absorbed by the domestic market and maintain price levels, much less strengthen prices,” Griffith says, in his weekly market comments. “U.S. red meat and poultry consumption for 2019 is estimated at 220.4 lbs. per person, which is about 2.5 lbs. higher than 2018, with 2018 consumption being the highest since 2007. The estimate for 2020 meat and poultry consumption is 3.1 lbs. higher than 2019. These consumption numbers do not represent demand, but how much meat must be consumed domestically based on production. These estimates are saying the export market is vital to support farm level prices.”

USDA forecasts more U.S. beef exports next year, compared to this year’s strong pace.

“Total exports (beef) in 2020 are forecast up 6% to a record 3.3 billion lbs., accounting for 12% of U.S. production,” say Analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The United States is poised to expand market share in top markets such as Japan, South Korea, and Taiwan as key competitor Australia struggles to maintain its market shares, given its reduced exportable supplies and its dominance in filling China demand.”

At the same time, ERS expects the U.S. to import less beef in 2020.

“U.S. imports will likely be limited by a combination of tighter supplies in Oceania and expected increased demand for beef in Asia due to African Swine Fever,” say ERS analysts.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 18

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

274,000

(+55,500)

44,000

(+25,400)

2,100

(-31,100)

320,100

(+20,300)

 

CME Feeder Index

CME Feeder Index* Oct. 17 Change
  $145.60 +  $0.97

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 18 Change
600-700 lbs. $151.45 + $0.15
700-800 lbs. $149.33 + $1.31
800-900 lbs. $146.84 + $0.37

 

South Central

Steers-Cash Oct. 18 Change
500-600 lbs. $149.18 + $0.90
600-700 lbs. $146.59 + $0.74
700-800 lbs. $147.70 + $2.08

 

Southeast

Steers-Cash Oct. 18 Change
400-500 lbs. $140.25 + $0.23
500-600 lbs. $132.98 + $1.13
600-700 lbs. $131.20 + $3.43

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 18 ($/cwt) Change
Choice $218.04 + $2.48
Select $193.04 + $4.36
Ch-Se Spread $25.00 –  $1.98

 

Futures

Feeder Cattle  Oct. 18 Change
Oct $143.500 –  $0.600
Nov $142.850 –  $1.400
Jan ’20 $139.450 –  $1.025
Mar $138.850 –  $0.300
Apr $140.325 –  $0.025
May $141.150 + $0.100
Aug $145.700 + $0.375
Sep $144.700 –  $0.075

 

Live Cattle   Oct. 18 Change
Oct $110.475 +$1.025
Dec $113.625 +$1.475
Feb ’20 $119.075 +$1.025
Apr $120.925 +$0.725
Jun $113.450 +$0.325
Aug $111.400 +$0.275
Oct $112.625 +$0.300
Dec $114.700 +$0.475
Feb ’21 $116.450 +$0.775

 

Corn futures Oct. 18 Change
Dec $3.910 – $0.066
Mar ’20 $4.026 – $0.050
May $4.094 – $0.032
Jul $4.152 – $0.012
Sep $4.064 – $0.012
Dec $4.102 – $0.002

 

Oil CME-WTI Oct. 18 Change
Nov $53.78 –  $0.92
Dec $53.87 –  $0.91
Jan ’20 $53.82 –  $0.90
Feb $53.62 –  $0.92
Mar $53.37 –  $0.97
Apr $53.08 –  $1.02

 

Equities

Equity Indexes Oct. 18 Change
Dow Industrial Average  26770.81 –     45.78
NASDAQ   8089.54 +    32.50
S&P 500    2986.17 +    15.90
Dollar (DXY)        97.14 –        1.19
Cattle Current Weekly Highlights—Week ending Oct. 18, 2019 2019-10-20T18:53:52-06:00

Cattle Current Weekly Highlights—Week ending Oct. 11, 2019

While discounts are increasing for un-weaned calves, demand continues strong for the dwindling supply of yearlings, according to the Agricultural Marketing Service (AMS).

“As the cash fed cattle market works its way higher and the supply of yearlings gets tighter, buyers are willing to chase the feeder market,” explained the AMS reporter on hand for Monday’s weekly auction at Sioux Falls Regional in South Dakota, where yearlings traded steady with instances of $2 higher.

Nationwide, AMS pegged the trend for cash calves and feeders at $3/cwt. lower to $2 higher, with calves in the Northern Plains trading for as much as $8 lower.

“The Southeast started to move more calves this week, compared to recent weeks and the demand would be considered moderate to good,” say AMS analysts. “Demand for feeders is good for those calves weaned at least 45 days and preferably for 60 days, along with a couple of rounds of shots.”

Although auction receipts increased week to week, winter weather in the Northern Plains and muddy feedlot conditions continued to limit demand. This year’s extended wet weather also appears to be weighing on weaning weights in some areas.

“In Nebraska, most sellers pick a week and sell their livestock at about the same time every year. The bulk of the calves and some yearlings are a few pounds lighter than last year,” AMS analysts explain. “Most pasture grass grew rapidly all summer and never hardened up. A lot of producers complained about washy grass and it has affected the weaning weight on a lot of calves.”

Feeder Cattle futures grew more optimistic, closing an average of $1.91 higher week to week on Friday (80¢to $2.87 higher). That was thanks to a mid-week surge that was difficult to explain.

Stronger futures also came in the face of Corn futures that were an average of 11¢ higher through the front four contracts week to week. Traders took Corn down hard Thursday, with bearish estimates in the World Agricultural Supply and Demand Estimates. They rebounded Friday with reports that the U.S. and China reached agreement to a phased approach to its trade standoff, which will suspend added tariffs, for now at least.

Carcass Weights Suggest Market Currentness

Except for some early sales in the North, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports.

Early dressed sales in Nebraska were $2 higher than the previous week at $172/cwt. Early dressed sales also were trading for $172 in the western Corn Belt, but too few to trend. Live sales in the western Corn Belt were steady to $2 higher than the previous week at $109. Live sales were at $109-$110 in Nebraska, but too few to trend.

Through Thursday, the average five-area direct fed steer price was $3.36 higher week to week at $109.08/cwt. on a live basis. The average dressed steer price was $3.44 higher at $170.08.

Live Cattle futures continued to extend recent gains, closing an average of $1.24 higher week to week on Friday (95¢higher to $2.10 higher in spot Oct).

Earlier in the week, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explained market impacts from the Tyson plant fire have mostly dissipated.

“Limited packing capacity will likely continue to restrict fed cattle prices somewhat, but it appears the industry has thus far avoided even worse implications of a serious backlog of fed cattle and a pronounced lack of ability to process cattle in a timely fashion,” Peel explained, in his weekly market comments.

Wholesale beef values also appear to have found a seasonal bottom.

Choice boxed beef cutout value was $3.70 higher week to week on Friday at $215.66/cwt. Select was $1.76 higher at $188.68.

Moreover, Andrew P. Griffith, agricultural economist at the University of Tennessee says retail beef prices are demand neutral. In his weekly market comments, he explains the all fresh beef retail price last month was $5.78/lb., which was 7¢less than the prior month and 5¢higher than the same time a year earlier.

“Total meat production is something to keep an eye on while trade deals are hashed out,” Griffith says. “It will take some strong trade deals and China importing a lot of meat protein from any country to help support prices and clear the market.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 11

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

218,500

(+28,800)

48,100

(-12,500)

33,200

(+28,900)

299,800

(+42,200)

 

CME Feeder Index

CME Feeder Index* Oct. 10 Change
  $144.65 +  $1.05

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 11 Change
600-700 lbs. $151.30 –  $1.06
700-800 lbs. $148.02 –  $4.18
800-900 lbs. $146.47 –  $0.51

 

South Central

Steers-Cash Oct. 11 Change
500-600 lbs. $148.28 –  $1.02
600-700 lbs. $145.85 –  $1.16
700-800 lbs. $145.62 –  $0.45

 

Southeast

Steers-Cash Oct. 11 Change
400-500 lbs. $140.02 + $0.95
500-600 lbs. $131.85 + $1.56
600-700 lbs. $127.77 + $1.49

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 11 ($/cwt) Change
Choice $215.66 + $3.70
Select $188.68 + $1.76
Ch-Se Spread $26.98 + $1.94

 

Futures

Feeder Cattle  Oct. 11 Change
Oct $144.100 + $3.675
Nov $144.250 + $3.650
Jan ’20 $140.475 + $3.500
Mar $139.150 + $3.000
Apr $140.350 + $3.000
May $141.050 + $2.550
Aug $145.125 + $3.775
Sep $144.475 + $0.975

 

Live Cattle   Oct. 11 Change
Oct $109.450 +$2.100
Dec $112.150 +$1.375
Feb ’20 $118.050 +$4.700
Apr $120.200 +$1.425
Jun $113.125 +$0.975
Aug $111.125 +$0.950
Oct $112.325 +$1.025
Dec $114.225 +$1.175
Feb ’21 $115.675 +$1.150

 

Corn futures Oct. 11 Change
Dec $3.976 +$0.130
Mar ’20 $4.076 +$0.106
May $4.126 +$0.102
Jul $4.164 +$0.108
Sep $4.076 +$0.072
Dec $4.100 +$0.058

 

Oil CME-WTI Oct. 11 Change
Nov $54.70 + $1.89
Dec $54.78 + $2.04
Jan ’20 $54.72 + $2.16
Feb $54.54 + $2.21
Mar $54.34 + $2.27
Apr $54.10 + $2.34

 

Equities

Equity Indexes Oct. 11 Change
Dow Industrial Average  26816.59 + 242.87
NASDAQ   8057.04 +    74.57
S&P 500    2970.27 +    18.16
Dollar (DXY)        98.33 –      0.51
Cattle Current Weekly Highlights—Week ending Oct. 11, 2019 2019-10-20T13:22:09-06:00

Cattle Current Weekly Highlights—Week ending Sept. 13, 2019

Cattle futures rallied after potentially finding the lows on Monday, but cash calf and feeder cattle prices continued under pressure most of the week.

Steers and heifers sold mostly $2-$6/cwt. lower, with calves as much as $10 lower, according to the Agricultural Marketing Service (AMS).

Week to week on Friday, Feeder Cattle futures closed an average of $3.29 higher ($2.55 to $3.77 higher).

“The most pressing issue from a marketing standpoint comes from the expectation that calf prices will continue to soften from now through November,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Producers are already taking a hit on the chin with relatively low calf prices…the market is poor and there is no near term improvement in sight with the fall marketing rush around the corner.”

In his neck of the woods, where dryness is spreading, Griffith noted some producers are compounding the situation by using available forage to hold calves longer in hopes of market improvement.

“The available marketing alternatives become fewer the longer a person waits to make a decision,” Griffith says. “Not only do alternatives become fewer, but the check often gets smaller.”

Fed Cattle Prices Sag

Fed cattle prices continued to grind lower on lighter week-to-week trade through late Friday afternoon.

Week to week through Thursday afternoon, on lighter trade, the Five Area direct average steer price was $2.82 lower at $99.49/cwt. on a live basis. The average dressed steer price was $6.69 lower at $159.50.

Through Friday afternoon, USDA reported negotiated prices in the Texas Panhandle $1 lower at $99. 

Live Cattle futures rallied, though, helped along by surging Lean Hog futures. Week to week on Friday, they were an average of $3.91 higher ($3.45 to $4.70 higher).

Plentiful supplies and the continued bottleneck resulting from less harvest capacity, resulting from the Tyson plant fire, continue to cap fed cattle price potential.

So far, it appears that positive fed cattle basis continues to encourage timely fed cattle marketing, maintaining currentness. However, Griffith explains that could change, given the incentive of further-out futures premiums.

“Cattle feeders have been willing sellers of fat cattle most of the year, but the market is beginning to send signals that may derail the marketing schedule and result in heavier cattle being marketed,” Griffith says. “The deferred contract months are trading at a premium compared to the October contract, which provides cattle feeders an incentive to feed cattle longer. The December Live Cattle contract has a $6/cwt. premium priced in compared to October while the February contract has more than a $12 premium. These types of premiums may result in feedlot managers deciding to keep cattle on feed two to three weeks longer in hopes of capturing higher prices. This decision will also result in more beef hitting the market.”

At the same time, besides seasonal pressure, wholesale beef prices continue downward, adjusting to fundamental price levels before the Tyson fire.

Choice boxed beef cutout value was $6.43 lower week to week on Friday at $220.88/cwt. Select was $3.34 lower at $198.60.

“Prices are closing in on $20 lower than their weekly peak but remain $5 higher than where they were prior to the fire,” Griffith explains. “It is likely boxed beef prices will continue to moderate as fall approaches since the market is typically soft compared to the summer. The next round of support for beef prices will be the holiday season, but holiday price support is a few months down the road.”

Chinese purchases of U.S. pork last week, if continued, could provide some support.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Sep. 13

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

176,400

(+69,600)

73,500

(+15,400)

122,000

(+107,300)

371,900

(+192,300)

 

CME Feeder Index

CME Feeder Index* Sept. 12 Change
  $136.09 –  $2.27

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 13 Change
600-700 lbs. $147.21 –  $8.08
700-800 lbs. $143.06 –  $4.09
800-900 lbs. $135.35 –  $5.10

 

South Central

Steers-Cash Sept. 13 Change
500-600 lbs. $142.74 –  $5.35
600-700 lbs. $141.30 –  $3.48
700-800 lbs. $137.73 –  $2.01

 

Southeast

Steers-Cash Sept. 13 Change
400-500 lbs. $139.62 –  $5.15
500-600 lbs. $132.09 –  $5.47
600-700 lbs. $126.86 –  $5.12

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 13 ($/cwt) Change
Choice $220.88 –  $6.43
Select $198.60 –  $3.34
Ch-Se Spread $22.28 –  $3.09

 

Futures

Feeder Cattle  Sept. 13 Change
Sep $136.500 + $3.150
Oct $134.575 + $3.675
Nov $134.025 + $3.650
Jan ’20 $131.975 + $3.500
Mar $131.400 + $3.000
Apr $132.625 + $3.000
May $132.975 + $2.550
Aug $135.975 + $3.775

 

Live Cattle   Sept. 13 Change
Oct $98.075 +$3.200
Dec $104.375 +$4.625
Feb ’20 $111.100 +$4.700
Apr $115.050 +$4.200
Jun $107.950 +$3.675
Aug $106.250 +$3.850
Oct $107.950 +$3.500
Dec $110.800 +$3.950
Feb ’21 $112.300 +$3.450

 

Corn futures Sept. 13 Change
Sep $3.554 +$0.130
Dec $3.686 +$0.132
Mar ’20 $3.814 +$0.128
May $3.904 +$0.130
Jul $3.970 +$0.124
Sep $4.006 +$0.106

 

Oil CME-WTI Sept. 13 Change
Oct $54.85 –  $1.67
Nov $54.80 –  $1.63
Dec $54.59 –  $1.58
Jan ’20 $54.27 –  $1.55
Feb $53.94 –  $1.52
Mar $53.61 –  $1.49

 

Equities

Equity Indexes Sept. 13 Change
Dow Industrial Average  27219.52 + 422.06
NASDAQ     8176.71 +    73.64
S&P 500     3007.39 +    28.68
Dollar (DXY)          97.86 –      0.53
Cattle Current Weekly Highlights—Week ending Sept. 13, 2019 2019-09-15T14:28:23-06:00

Cattle Current Weekly Highlights—Week ending Sept. 6, 2019

Sliding cash fed cattle prices cast a pall over markets, especially later in the week.

Overall, feeders and calves traded $3/cwt. lower to $2 higher, according to the Agricultural Marketing Service (AMS), with the most strength in the North Central region.

Thanks to a surge early in the week, Feeder Cattle futures closed an average of 58¢higher across a broad range (5¢to $1.05 higher), except for 2¢lower in Jan.

“The market price movement from the middle of April to the beginning of September has been a violent ride from a futures standpoint,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A quick glance at the September contract shows a decline from $162/cwt. at the peak to below $134 recently. The cash prices have not seen as violent of a movement, but they have not benefited from this type of action.”

Between extending grazing opportunities and lousy prices, auction receipts continue lighter year over year. Year to date, auction, direct and video receipts counted by the National Feeder and Stocker Cattle Summary are 4.4% less than the same time last year, according to AMS.

“Feeder cattle producers have been hesitant to offer yearlings for sale as they would like to see a higher market, but with an abundance of grass, the need to pull cattle off and ship them to town has diminished,” say AMS analysts. “Feedlot backgrounders are just as hesitant to sell cattle but are also very concerned of where the market could go if the Live Cattle futures contracts go lower yet.”

Cash Fed Cattle Prices Continue Lower

Live sales ended up $3 lower in the Southern Plains last week at $100/cwt., $4-$6 lower in Nebraska at mostly $100 and $2-$5 lower in the western Corn Belt at $102-$107. Dressed sales were $9-$10 lower in Nebraska at $160-$166; $7-$9 lower in the western Corn Belt at $163-$166.

Week to week on Friday, Live Cattle futures closed an average of $3.53 lower through the front three contracts and then and average of 46¢lower.

“The weak Live Cattle futures complex is hanging heavy on cattle feeders’ minds as they want to buy yearlings and get them placed on feed, but breakeven prices are much higher than current futures prices,” say AMS analysts. “Outgoing fed cattle continue to lose money and the outlook going forward is very murky, leaving cattle feeders very unsure of what they should do.”

Choice boxed beef cutout value was $4.46 lower week to week on Friday at $227.31/cwt. Select was $10.33 lower at $201.94.

“Boxed beef prices have spent the last couple of weeks retreating from their post-Tyson fire high,” Griffith explains. “The two weeks following the fire, the Choice cutout value escalated nearly $34 to just shy of $240/cwt. This was an unexpected price boom for packers who generally have to fight the market in late summer and fall. However, they continue to benefit from the sudden price escalation as prices this week remain a good $12 higher than where they were prior to the fire.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Sep. 6

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

106,800

(-43,600)

58,100

(-500)

14,700

(-197,100)

179,600

(-241,200)

 

CME Feeder Index

CME Feeder Index* Sept. 5 Change
  $138.36 –  0.19

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 6 Change
600-700 lbs. $155.29 + $1.37
700-800 lbs. $147.15 + $0.57
800-900 lbs. $140.45 –  $1.75

 

South Central

Steers-Cash Sept. 6 Change
500-600 lbs. $148.09 –  $2.26
600-700 lbs. $144.78 –  $1.34
700-800 lbs. $139.74 –  $1.97

 

Southeast

Steers-Cash Sept. 6 Change
400-500 lbs. $144.77 –  $1.12
500-600 lbs. $137.56 –  $1.23
600-700 lbs. $131.98 –  $2.03

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 6 ($/cwt) Change
Choice $227.31 –  $4.46
Select $201.94 –  $10.33
Ch-Se Spread $25.37 + $5.87

 

Futures

Feeder Cattle  Sept. 6 Change
Sep $133.350 + $0.950
Oct $130.900 + $0.100
Nov $130.375 + $0.050
Jan ’20 $128.475 –  $0.025
Mar $128.400 + $0.350
Apr $129.625 + $0.700
May $130.425 + $0.850
Aug $132.200 + $1.050

 

Live Cattle   Sept. 6 Change
Oct $94.875 – $4.050
Dec $99.750 – $3.925
Feb ’20 $106.400 – $2.625
Apr $110.850 – $0.325
Jun $104.275 – $0.125
Aug $102.400 – $0.075
Oct $104.450 – $0.225
Dec $106.850 – $1.550

 

Corn futures Sept. 6 Change
Sep $3.424 – $0.156
Dec $3.554 – $0.142
Mar ’20 $3.686 – $0.136
May $3.774 – $0.126
Jul $3.846 – $0.124
Sep $3.900 – $0.092

 

Oil CME-WTI Sept. 6 Change
Oct $56.52 + $1.42
Nov $56.43 + $1.54
Dec $56.17 + $1.61
Jan ’20 $55.82 + $1.66
Feb $55.46 + $1.68
Mar $55.10 + $1.67

 

Equities

Equity Indexes Sept. 6 Change
Dow Industrial Average  26796.46 + 394.18
NASDAQ     8103.07 + 140.19
S&P 500     2978.71 +   52.25
Dollar (DXY)          98.01 –      0.80
Cattle Current Weekly Highlights—Week ending Sept. 6, 2019 2019-09-08T13:24:25-06:00

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