Weekly Market Highlights

Cattle Current Weekly Highlights—Week ending April 2, 2021

Higher cash fed cattle prices and the extraordinary surge in wholesale beef values helped Cattle futures maintain most of the previous week’s sharp gains, despite midweek pressure from surging grain prices.

Nationwide, steers and heifers sold $1-$4/cwt. higher, according to the Agricultural Marketing Service (AMS).

“As the major feedstocks for cattle were sharply higher, buyers wanted to procure more thinner fleshed cattle that will have compensatory gain instead of a fleshier one that will not feed very efficiently,” say AMS analysts.

Feeder Cattle futures closed narrowly mixed, week to week on Thursday, from 35¢ lower to 45¢ higher. During the same period, Corn futures closed an average of 16¢ higher through the front six contracts, elevated by a surprising USDA Prospective Plantings report (see below).

Prices for lightweight cattle should be nearing the seasonal peak, according to Andrew P. Griffith, agricultural economist at the University of Tennessee.

“There is certainly room for prices to push higher the next three to four weeks, but the momentum is expected to slow, and prices will turn the other direction as summer nears,” Griffith explains, in his weekly market comments. “The yearling cattle market has started to creep higher with the advent of a strengthening futures market. Summer and fall Feeder Cattle futures contracts made about $8 gains in March before being slowed by the USDA planting intentions and grain stocks reports.”

Grain Futures Spike Higher

U.S. producers intend to plant more acres to corn and soybeans this year than in 2020, according to the Prospective Plantings report. However, estimates were around significantly less than pre-report expectations for both crops.

Producers surveyed across the United States intend to plant an estimated 91.1 million acres of corn in 2021. That’s 325,000 more acres than last year, but about 2 million acres shy of expectations.

Soybean growers intend to plant 87.6 million acres in 2021, up 5% from last year, but about 2.5 million acres shy of pre-report expectations by private analysts. If realized, this will be the third highest planted acreage on record.

Corn and Soybean futures were limit up on Wednesday.

Griffith notes continued strength in Feeder Cattle futures, in the face of the grain friendly report suggests cattle producers expect corn and soybean prices to moderate.

“This is very likely in that the prices being projected for corn and soybeans should pull more acres into production,” Griffith says. “An increase in acreage should result in increased total production and thus lower prices. At this point, this is all speculation. What is known is that some extremely favorable prices for selling corn, soybeans, and feeder cattle can be captured today by using the futures market or forward contracting. The alternative to capturing these prices is doing nothing and simply crossing days off the calendar.”

Fed Cattle Prices Gain

By the end of the week, live prices were $2 higher in the Southern Plains at $117/cwt., $2 higher in Nebraska at mostly $118 (some up to $121) and $3-$4 higher in the western Corn Belt at $119-$120. Dressed trade was $5 higher at $190.

“Cattle feeders are slowly gaining leverage, and packers once again have several extra dollars to play with as beef prices increase,” Griffith says. “This does not mean packers will go down without a fight, but fed cattle prices will continue to creep higher the next several weeks. Live Cattle futures are pricing the June contract at nearly a $2.50 premium to April and August at a $1.50 premium. If this price pattern were to materialize, it would be a contra-seasonal price movement for finished cattle.”

Week to week on Thursday, Live Cattle futures closed an average of $1.04 higher (47¢ to $1.47 higher).

Significant strength in outside markets help bolster beef market optimism. Although investors are leery of increased inflation and interest rates, the increased rate of COVID-19 vaccinations and apparently bottomless government coffers continue to underpin equity markets. The Dow Jones Industrial Average was 533 points higher, week to week on Thursday. The NADASQ closed 502 points higher. The S&P 500 was up 110 points.

Wholesale Beef Prices Climb

Choice boxed beef cutout value was $15.19 higher week to week on Friday at $252.85/cwt. Select was $19.20 higher at $246.97. That’s $22.86 higher for Choice over the last two weeks; $27.02 higher for Select.

“The two drivers of higher beef prices are likely restaurants increasing dining capacity and consumers continuing to use discretionary spending on their eating experience, since many do not feel comfortable traveling yet,” Griffith explains. “How these factors change as an increasing number of Americans get a coronavirus vaccine will be determined in coming months. Another boost to the beef market will be the return of fans to baseball stadiums. Stadiums may not be filled to capacity, but those who are there will likely be eating hamburgers and beef hotdogs.”

 

Week to Week Change

Weekly Auction Receipts

Apr. 5 Auction Direct

Video/net

Total
 

193,300

(-7,900)

57,100

(+14,700)

6,600

(-26,300)

257,000

(-19,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Apr. 1 Change
  $140.63 +  $3.88

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 5 Change
600-700 lbs. $164.06 +  $4.07
700-800 lbs. $148.25 +  $0.61
800-900 lbs. $140.02 +  $1.36

South Central

Steers-Cash Apr. 5 Change
500-600 lbs. $168.69 +  $3.36
600-700 lbs. $155.00 +  $3.48
700-800 lbs. $142.00 +  $2.38

Southeast

Steers-Cash Apr. 5 Change
400-500 lbs. $165.92 +  $2.95
500-600 lbs. $153.19 +  $1.55
600-700 lbs. $142.27 +  $3.23

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr. 2 ($/cwt) Change
Choice $252.85 + $15.19
Select $246.97 + $19.20
Ch-Se Spread $5.88 –  $4.01

 

Futures

Feeder Cattle  Apr. 1 Change
Apr $143.875 –  $0.350
May $149.225 + $0.100
Aug $158.000 –  $0.125
Sep $158.625 + $0.125
Oct  $159.150 + $0.250
Nov $159.300 + $0.450
Jan ’22 $157.500 + $0.400
Mar $155.050 –  $0.300

 

Live Cattle   Apr. 1 Change
Apr $120.025 + $0.475
Jun $122.550 + $1.475
Aug $121.525 + $1.150
Oct $124.625 + $0.950
Dec $127.450 + $1.100
Feb ’22 $130.150 + $1.175
Apr $130.900 + $1.150
Jun $125.000 + $1.100
Aug $123.850 + $0.750

 

Corn  Apr. 1 Change
May $5.596 + $0.132
Jly $5.452 + $0.128
Sep $5.010 + $0.184
Oct $4.844 + $0.190
Mar ’22 $4.912 + $0.178
May $4.944 + $0.160

 

Oil CME-WTI Apr. 1 Change
May $61.45 + $2.89
Jun $61.48 + $2.91
Jly $61.35 + $2.95
Aug $61.04 + $2.97
Sep $60.62 + $2.96
Oct $60.17 + $2.95

 

Equities

Equity Indexes Apr. 1 Change
Dow Industrial Average  33153.21 +    533.73
NASDAQ  13480.11 +    502.43
S&P 500    4019.87 +     110.35
Dollar (DXY)         92.88 +         0.35
Cattle Current Weekly Highlights—Week ending April 2, 2021 2021-04-05T16:15:25-05:00

Cattle Current Weekly Highlights—Week ending March 26, 2021

Negotiated cash fed cattle prices finally budged beyond their seven-week rut and wholesale beef values continued to make seasonal gains. Both helped support higher Cattle futures prices for the week. All of that and the fast approaching grass season helped calves and feeder cattle trade from steady to mainly higher, based on the weekly auctions monitored by Cattle Current.

Steers and heifers sold steady to $5/cwt. higher, except for $4-$7 higher in the Northern Plains, according to the Agricultural Marketing Service (AMS).

“Demand was good to very good as order buyers were aggressive at filling the needs of feedlot managers and backgrounders,” say AMS analysts. “The supply of lightweight cattle continues to be tight which is keeping that market red hot…”

“Calf and feeder cattle prices are attempting to push higher as grass fever heats up and as many Feeder Cattle futures contracts tested contract highs this week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee (UT), in his weekly market comments. “… Feeder Cattle futures are offering a great opportunity to hedge a strong price on cattle that will be marketed between August and November.”

Specifically, Griffith explains those contracts offer a 150 to 240-day  backgrounding period to capitalize on current prices, while offering a wide marketing window. In the meantime, he notes cool-season grasses are about two weeks ahead of schedule in the Southeast.

Feeder Cattle futures closed an average of $3.18 higher week to week on Friday (60¢ higher at the back to $5.70 higher in spot Apr).

The CME Feeder Cattle Index was $2.72 higher week to week on Thursday at $136.75.

“There is some concern by cattle producers that higher feed prices could put significant pressure on feeder cattle prices, but that is not a concern if one takes advantage of what the market is currently offering in the form of price risk management,” Griffith says.

Consolidating to lower Corn futures prices added optimism to cattle markets. Corn futures closed an average of 4.6¢ lower through the front six contracts, week to week on Friday.

“December corn is approaching a key support level of $4.60/bu.. If prices fall below $4.60, the next level of support will be $4.40,” says Aaron Smith, UT crops marketing specialist , in his weekly market comments. “Next week’s Prospective Plantings report (Mar. 31) could provide a major push (up or down) for corn prices depending on USDA estimates. Current estimates are 92 million acres of corn and 90 million acres of soybeans. The harvest price ratio of 2.6 still favors soybeans, but if weather cooperates, many farmers may plant corn. Heading into the report, having some production priced should be strongly considered, as historically, this report has moved markets.”

Cash Fed Cattle Prices Increase

Negotiated cash fed cattle prices were $1-$2 higher last week at $115/cwt. in the Southern Plains and $116 in the Northern Plains, according to  AMS. Dressed trade was $2-$3 higher in Nebraska at $185. Trade was yet to be established in the western Corn Belt, according to AMS, but various reports suggested trade in the region at as much as $3 higher than the previous week.

Week to week on Friday, Live Cattle futures closed an average of $2.08 higher (75¢ higher at the back to $3.10 higher).

“The slight progression in prices this week provide optimism for further price improvement moving through April and into May. The market continues to trade at a large discount to April Live Cattle futures, but cash prices for finished cattle have the ability to push above the $120 price level,” Griffith says.

Meanwhile, wholesale beef prices are making seasonal strides higher.

Choice boxed beef cutout value was $7.67 higher week to week on Friday at $237.66/cwt. Select was $7.82 higher at $227.77.

Plus, optimism continues to grow for the steady pace of COVID-19 vaccinations to continue bringing back some normalcy to markets and everyday life.

“There is considerable optimism for fed cattle markets going forward, beginning in the second quarter and especially in the second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “…Feedlots have been somewhat front-loaded thus far in 2021 which has contributed to the sluggish fed cattle markets in the first quarter of the year. Feedlot supplies should tighten in the second half of the year after working through current inventories.”

Friday to Friday Change

Weekly Auction Receipts

Mar. 29 Auction Direct

Video/net

Total
 

201,200

(+36,800)

42,400

(-19,200)

32,900

(+29,200)

276,500

(+46,800)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 25 Change
  $136.75 +  $2.72

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 29 Change
600-700 lbs. $159.99 +  $7.22
700-800 lbs. $147.64 +  $5.70
800-900 lbs. $138.66 +  $4.65

South Central

Steers-Cash Mar. 29 Change
500-600 lbs. $165.33 +  $1.43
600-700 lbs. $151.52 +  $2.94
700-800 lbs. $139.62 +  $1.55

Southeast

Steers-Cash Mar. 29 Change
400-500 lbs. $162.97 –   $0.12
500-600 lbs. $151.64 +  $1.87
600-700 lbs. $139.04 +  $1.57

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 26 ($/cwt) Change
Choice $237.66 + $7.67
Select $227.77 + $7.82
Ch-Se Spread $9.89 –  $0.15

 

Futures

Feeder Cattle  Mar. 26 Change
Apr $145.125 + $5.700
May $149.875 + $5.200
Aug $158.450 + $3.525
Sep $158.825 + $3.000
Oct  $159.050 + $2.700
Nov $159.000 + $2.400
Jan ’22 $157.350 + $2.350
Mar $155.600 + $0.600

 

Live Cattle   Mar. 26 Change
Apr $120.100 + $1.700
Jun $121.175 + $3.100
Aug $120.875 + $3.100
Oct $124.125 + $2.625
Dec $126.575 + $2.375
Feb ’22 $129.125 + $2.000
Apr $129.850 + $1.750
Jun $124.150 + $1.350
Aug $122.900 + $0.750

 

Corn  Mar. 26 Change
May $5.524 –  $0.052
Jly $5.356 –  $0.030
Sep $4.836 –  $0.058
Oct $4.664 –  $0.050
Mar ’22 $4.746 –  $0.046
May $4.796 –  $0.044

 

Oil CME-WTI Mar. 26 Change
May $60.97 –  $0.47
Jun $60.96 –  $0.35
Jly $60.76 –  $0.25
Aug $60.40 –  $0.17
Sep $59.93 –  $0.12
Oct $59.42 –  $0.08

 

Equities

Equity Indexes Mar. 26 Change
Dow Industrial Average  33072.88 +     444.91
NASDAQ  13138.72 –        76.52
S&P 500    3974.54 +       61.44
Dollar (DXY)         92.72 +         0.80
Cattle Current Weekly Highlights—Week ending March 26, 2021 2021-03-29T14:32:10-05:00

Cattle Current Weekly Highlights—Week ending March 19, 2021

Calves and feeder cattle continued to trade mixed last week, but mainly higher, with the strongest demand for grass cattle once again.

Nationwide, steers and heifers sold mostly steady to $5/cwt. higher, with instances of $6-$8 higher, according to the Agricultural Marketing Service (AMS).

“Buyers pursued all classes of feeder cattle, despite high feed cost,” say AMS analysts. “The supply of feeders weighing 600-950 lbs. is much greater, with backgrounded steers and heifers, and saw moderate to good demand, especially for those with good weighing conditions.”

AMS analysts also note auction receipts were lighter in the Midwest and Northern Plains last week as some auctions transition to a semi-monthly schedule and as the late winter storm hampered some cattle movement.

High corn prices and stagnant cash fed cattle prices helped pressure Cattle futures last week, although fundamentals suggest markets are on the cusp of moving higher.

“After the fed cattle market works through ample cattle supplies in the first half of the year, beef production is expected to decrease year over year in the second half of the year. Live Cattle futures for the fall suggest higher fed cattle prices in the last half of the year,” says, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Similarly, Peel points to the premium for fall Feeder Cattle futures, compared to nearby contracts, explaining that summer stocker prospects are promising at this point in time.

“Feeder steer prices for February 2021 averaged $131.82/cwt. for steers weighing 750-800 lbs., sold at Oklahoma National Stockyards, just over $6 above a year ago,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “However, prices for the first two weeks of March are almost $8 above the same month last year.”

ERS increased the expected first-quarter average for feeder steers by $1 to $133/cwt. Price projections were unchanged for the remainder of the year: $134 in the second quarter; $139 in the third quarter; $140 in the fourth quarter; $136.50 for the 2021 average.

In the meantime, Feeder Cattle futures gave back a majority of the previous week’s gains, closing an average of $1.89 lower week to week on Friday (90¢ lower toward the back to $3.80 lower toward the front).

Week to week on Friday, Corn futures closed an average of 14¢ higher in the front two contracts (old crop) and then an average of about 7¢ lower through the next four.

Fed Cattle Prices Show Some Give

Negotiated cash fed cattle prices last week were steady on a live basis at $114/cwt. in Kansas, steady to $1 higher in Nebraska at $114, $1-$2 higher in the western Corn Belt at $114-$115. Prices were a touch higher than steady in the Texas Panhandle, with the Texas Cattle Feeders Association reporting $114.24 for steers and $114.30 for heifers. Dressed trade was $2 higher in Nebraska and $2-$4 higher in the western Corn Belt at $182.

“Live steer prices in the five-area marketing region are nearly flat since the first week of February, hovering around $114/cwt., despite a strong rally in the comprehensive cutout to near-record levels for the month of February,” explain ERS analysts. “An abundant supply of fed cattle on feed over 150 days Feb. 1 that is greater than the same time last year, along with the inability to process a portion of those cattle due to the winter storm system in February, likely did not support higher prices in line with typical seasonal patterns.”

Week to week on Friday, Live Cattle futures closed an average of $1.26 lower (35¢ lower at the back to $2.20 lower).

“Cattle feeders have watched the Apr Live Cattle contract continue to struggle, unable to get to the $120.00 mark, as Apr is normally the high of the year, when supplies of market-ready cattle are the tightest,” say AMS analysts. “We have seen a very unusual premium in the Live Cattle Jun and Aug contracts for this time of year.”

Choice boxed beef cutout value was $4.12 higher week to week on Friday at $229.99/cwt. Select was 32¢ lower at $219.95.

“Boxed beef cutout values are finding a bottom and seeing strength, as the food service industry is expected to see more business, with expectations for restaurant industry sales to increase through spring into summer,” according to AMS analysts. As well, they point to expectations for increased retail demand heading into grilling season.

No COF Surprises

Cattle feeders placed 1.68 million head in February, according to the monthly Cattle on Feed report from USDA—for feedlots with 1,000 head or more capacity. That was 1.86% less than a year earlier and close to average expectations ahead of the report for a decline of 1.7%.

Recent winter storms that closed sale barns may have limited placements. On the other hand, current and expected wheat prices may elevate feedlot placements in March, as more producers with a dual-purpose winter wheat crop look to put it in the bin.

“…the expectation that relatively high wheat prices may discourage the grazing-out of small grains pastures and move more cattle into feedlots sooner than previously expected is anticipated to shift placements from the second quarter to the first quarter,” ERS analysts say. “As a result, some fed cattle marketings are expected to shift from the fourth quarter to the third quarter.”

Feedlot marketings in February of 1.73 million head were 43,000 head fewer (-2.42%) year over year. Expectations ahead of the report were for a decline of 2.6%.

“Because of the weather disruption, there is a temporal shift of expected steer and heifer marketings out of the first quarter to be marketed in the second quarter,” say ERS analysts.

Cattle on feed March 1 of 12.0 million head were 189,000 head more (+1.60%), the second highest inventory for the month since the data series began in 1996. Average pre-report expectations were for an increase of 1.5%.

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 22 Auction Direct

Video/net

Total
 

164,400

(-138,800)

61,600

(+2,700)

3,700

(-6,500)

229,700

(-164,300)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 18 Change
  $134.03 –   $0.10

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 22 Change
600-700 lbs. $152.77 –   $1.64
700-800 lbs. $141.94 +  $0.09
800-900 lbs. $134.01 +  $3.06

South Central

Steers-Cash Mar. 22 Change
500-600 lbs. $163.90 +  $0.90
600-700 lbs. $148.58 +  $0.23
700-800 lbs. $138.07 +  $1.48

Southeast

Steers-Cash Mar. 22 Change
400-500 lbs. $163.09 +  $0.22
500-600 lbs. $149.77 +  $1.15
600-700 lbs. $137.47 +  $1.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 19 ($/cwt) Change
Choice $229.99 + $4.12
Select $219.95 –  $0.32
Ch-Se Spread $10.04 + $4.44

 

Futures

Feeder Cattle  Mar. 19 Change
Mar $134.675 –   $1.675
Apr $139.425 –   $3.800
May $144.675 –   $3.700
Aug $154.925 –   $1.650
Sep $155.825 –   $1.325
Oct  $156.350 –   $0.975
Nov $156.600 –   $0.900
Jan ’22 $155.000 –   $1.100

 

Live Cattle   Mar. 19 Change
Apr $118.400 –   $0.600
Jun $118.675 –   $1.750
Aug $117.775 –   $2.000
Oct $121.500 –   $2.200
Dec $124.200 –   $1.700
Feb ’22 $127.125 –   $1.100
Apr $128.100 –   $0.900
Jun $122.800 –   $0.775
Aug $122.150 –   $0.350

 

Corn  Mar. 19 Change
May $5.576 + $0.186
Jly $5.386 + $0.102
Sep $4.894 –  $0.066
Oct $4.714 –  $0.072
Mar ’22 $4.792 –  $0.072
May $4.840 –  $0.062

 

Oil CME-WTI Mar. 19 Change
Apr $61.42 –  $4.19
May $61.44 –  $4.20
Jun $61.31 –  $4.05
Jly $61.01 –  $3.83
Aug $60.57 –  $3.62
Sep $60.05 –  $3.43

Equities

Equity Indexes Mar. 19 Change
Dow Industrial Average  32627.97 –      150.67
NASDAQ  13215.24 –      104.63
S&P 500    3913.10 –        30.24
Dollar (DXY)         91.74 +         0.06
Cattle Current Weekly Highlights—Week ending March 19, 2021 2021-03-22T13:06:26-05:00

Cattle Current Weekly Highlights—Week ending March 12, 2021

Calves and feeder cattle sold mixed at the weekly auctions monitored by Cattle Current last week, but mainly steady to higher in the Southeast.

Sluggish, stagnant negotiated cash fed cattle prices, tied to the abundant supply, and seasonally weaker wholesale beef prices continue to hamper markets. On the other hand, improving supply fundamentals after the first quarter and the potential for a demand bounce from COVID-19 economic stimulus are boosting confidence.

Passage of the federal government’s $1.9 trillion coronavirus relief funding added support to overall equity and commodity markets last week, along with growing optimism the nation’s vaccination program is paving the way toward economic recovery.

Week to week on Friday, Feeder Cattle futures closed an average of $2.42 higher ($1.25 higher at the back to $4.20 higher toward the front).

The CME Feeder Cattle Index was 72¢lower week to week on Thursday at $134.13.

“The number of stocker cattle buyers is increasing as warm weather has resulted in cool season perennial pastures starting to green and grow,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This trend will continue the next several weeks as spring and summer grazing operations look to fill pastures with lightweight cattle that will be efficient on grass and that will be ready for the feedlot in late summer or early fall. The primary interest in cattle is the lightweight animals. Heavier feeder cattle that would be destined for the feedlot are not garnering as much interest.”

In the meantime, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out auction volumes will increase in the Southern Plains over the next few weeks as cattle grazing dual-purpose winter wheat pasture head to market.

“Another factor hanging over feeder markets is the dramatic rise in feed costs and feedlot cost of gain,” Peel says, in his weekly market comments. “The latest summary of the Kansas Focus on Feedlots data shows that feedlot cost of gain for closeouts in January was up 8.6% from the recent low in October. Feedlot cost of gain will continue to increase and reflect higher grain prices in the coming months. Feeder prices will continue to adjust in response higher feed prices as the year progresses.”

There was a brief, slight respite last week with Corn futures closing an average of 5.5¢ lower on Friday, through the front six contracts (2.6¢ to 12.8¢ lower).

“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”

ERS left the 2020-21 U.S. corn supply and use outlook unchanged in the latest monthly World Agricultural Supply and Demand Estimates (WASDE) released last week. The projected season-average farm price also was unchanged at $4.30/bu. 

Fed Cattle Prices Continue Steady

During the next several months, cattle feeders should begin wresting some long-held market leverage back from beef packers. Until then, packers are holding prices in check.

Negotiated cash fed cattle prices were steady last week at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade was steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Week to week on Friday, Live Cattle futures an average of $1.68 higher (87¢ to $2.70 higher) except for 2¢ lower in spot Apr.

“For six consecutive weeks, finished cattle have traded steady, with the 5-area weighted average price being in less than a $0.50/cwt. range,” Griffith says. “This screams packer leverage and complete control of the market in the short term. How long packers will maintain this leverage is not known. The supply information would indicate leverage shifting to cattle feeders fairly soon. However, it seems we do not always have complete information in this analysis. The April Live Cattle contract has declined $6 over a four-week period and the cash price is showing no signs of making a run to $120, much less to $126 where it peaked. A rally through the end of March will go a long way to positivity throughout the cattle complex.”

Fed steer price forecasts were unchanged in the latest WASDE at $113/cwt. for the first and second quarters, $114 in the third quarter and $119 in the fourth quarter for an annual average of $115.

Wholesale Beef Prices Soften

Choice boxed beef cutout value was $5.46 lower week to week on Friday at $225.87/cwt. Select was 58¢ lower at $220.27.

Griffith points out declining Choice prices the past couple of weeks, as well as the narrowing Choice-Select price spread are typically associated with January and February, rather than March.

“January and February tend to be the weakest demand months for beef, which depresses beef prices. Similarly, the shift in beef consumption during the winter months tends to be from middle meats to end meats, which results in the narrowing of the Choice-Select spread,” Griffith explains. “As the market moves through March, Choice beef prices tend to escalate more quickly than Select prices, because the market is gearing up for post-Easter demand and the grilling season.”

ERS analysts increased estimated beef production for this year by 40 million lbs. in the latest WASDE to 27.58 billion lbs.

“First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter,” according to ERS analysts. “Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements.”

Total red meat and poultry production was reduced 127 million lbs. to 107.47 billion lbs., with expected reductions in pork, broiler and turkey production.

Friday to Friday Change

Weekly Auction Receipts

Mar. 15 Auction Direct

Video/net

Total
 

303,200

(+20,400)

58,900

(+2,200)

31,900

(+19,000)

394,000

(+41,600)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 11 Change
  $134.13 –   $0.72

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 15 Change
600-700 lbs. $154.41 –   $0.60
700-800 lbs. $141.85 –   $1.19
800-900 lbs. $130.95 –   $2.49

South Central

Steers-Cash Mar. 15 Change
500-600 lbs. $163.00 –   $1.47
600-700 lbs. $148.35 +  $2.30
700-800 lbs. $136.59 +  $1.28

Southeast

Steers-Cash Mar. 15 Change
400-500 lbs. $162.87 –   $1.75
500-600 lbs. $148.62 –   $2.16
600-700 lbs. $136.32 –   $0.82

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 12 ($/cwt) Change
Choice $225.87 –  $5.46
Select $220.27 –  $0.58
Ch-Se Spread $5.60 –  $4.88

 

Futures

Feeder Cattle  Mar. 12 Change
Mar $136.350 +  $1.750
Apr $143.225 +  $4.200
May $148.375 +  $3.225
Aug $156.575 +  $2.850
Sep $157.150 +  $2.325
Oct  $157.325 +  $1.950
Nov $157.500 +  $1.850
Jan ’22 $156.100 +  $1.250

 

Live Cattle   Mar. 12 Change
Apr $119.000 –   $0.025
Jun $120.425 +  $2.425
Aug $119.775 +  $2.700
Oct $123.700 +  $2.250
Dec $125.900 +  $1.425
Feb ’22 $128.225 +  $1.325
Apr $129.000 +  $0.875
Jun $123.575 +  $1.075
Aug $122.500 +  $1.375

 

Corn  Mar. 12 Change
Mar ’21 $5.492 –  $0.128
May $5.390 –  $0.064
Jly $5.284 –  $0.056
Sep $4.960 –  $0.030
Oct $4.786 –  $0.028
Mar ’22 $4.864 –  $0.026

 

Oil CME-WTI Mar. 12 Change
Apr $65.61 –  $0.48
May $65.64 –  $0.28
Jun $65.36 –  $0.09
Jly $64.84 + $0.03
Aug $64.19 + $0.12
Sep $63.48 + $0.18

Equities

Equity Indexes Mar. 12 Change
Dow Industrial Average  32778.64 +  1282.34
NASDAQ  13319.87 +    399.72
S&P 500    3943.34 +       92.40
Dollar (DXY)         91.66 –            0.32
Cattle Current Weekly Highlights—Week ending March 12, 2021 2021-03-20T13:38:23-05:00

Cattle Current Weekly Highlights—Week ending March 5, 2021

Except for steady to mostly higher in the Southeast, calves and feeder cattle sold mixed last week, based on auction sales monitored by cattle Current.

“Corn made another sharp gain on Tuesday and the recent volatility in that market along with the fact that cattle feeders have been unable to achieve higher prices for fed cattle made buyers conservative on some of the heavier yearlings,” explained the AMS market reporter on hand for Tuesday’s sale at Kingsville Livestock Auction in Missouri, where steers weighing 850-900 lbs. sold $5-$8 lower.

Worries about rising inflation rates and interest rates competed with optimism about pandemic recovery, fueling overall commodity and equity market uncertainty.

The CME Feeder Cattle Index was $4.06 lower week to week on Thursday at $134.85.

Week to week on Friday, Feeder Cattle futures closed an average of $1.94 higher (7¢ to $3.20 higher), except for an average of $3.81 lower in the front two contracts.

“Whiplash is running rampant through Feeder Cattle futures,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Since the start of 2021, March Feeder Cattle futures prices have traded in nearly a $15 range.

“The wide price swings were most evident in January, followed by a much narrower trading range in February. However, futures started March on a negative note, which means there will have to be a large swing to the upside for sellers to see any benefit on the cash market. Summer and fall Feeder Cattle futures contracts tend to rally out of March, but that does not mean much for the spring contracts. All eyes are on the finished cattle market to help determine where feeder cattle prices should be this spring. March-placed cattle generally come off feed in the August and September time period, which means the August Live Cattle market is a major determinant of current feeder cattle prices. If there is a Live Cattle price rally this spring, then that could result in cattle feeders being willing to bet on the come or bet on higher prices in the future, which may mean they will be willing to spend some of their profits to pay up for feeder cattle. The current market dynamics present a great example of why it is important to be an active cattle marketer compared to a passive marketer.”

Rising feed costs continue to hamper calf and feeder cattle prices, as well.

Week to week on Friday, Corn futures closed an average of 9¢ higher through the front six contracts, except for an average of 1¢ lower in near May and Jly.

Week to week on Friday, Soybean futures closed an average of 25¢ higher through the front six contracts.

USDA issues the monthly World Agricultural Supply and Demand Estimates Tuesday (Mar. 9), which hold the potential to add price volatility.

Fed Cattle Trudge Steady

Negotiated cash fed cattle prices continued in the steady rut last week, as packers exploited plentiful supplies and sold-ahead inventory. Plenty of folks also expect more wheat pasture cattle to move this month, given the current value of harvesting a dual-purpose winter wheat crop.

For the week, established trade was steady on a live basis at $114/cwt. in the Southern Plains and Northern Plains. Dressed trade in Nebraska was $2 lower at $180. The previous week, live sales in the western Corn Belt were at $114, with dressed trade at $182.

Week to week on Friday, Live Cattle futures closed an average of 97¢ higher (2¢ to $1.50 higher) except for an average of 70¢ lower in the front two contracts.

As mentioned in the last Cattle Current weekly summary, Kevin Good, vice president of industry relations and analysis at CattleFax sees this year as a tale of two halves.

“There are more cattle in the system early in 2021 with big supplies on feed and heavy weights, however the second part of the year will transition to tighter calf crops and tighter slaughter,” Good explained during the Feb. 24 CattleFax Outlook during the virtual 2021 Cattle Industry Convention Winter Reboot.

CattleFax projects total slaughter this year to be 33.5 million head, which would be 700,000 head more year over year. Average carcass weights are projected 4 lbs. lighter.  Beef production is projected 500 million lbs. more than 2020 to 27.6 billion lbs.

Choice boxed beef cutout value was $9.20 lower week to week on Friday at $231.33/cwt. Select was $8.88 lower at $220.85.

Friday to Friday Change

Weekly Auction Receipts

Mar. 8 Auction Direct

Video/net

Total
 

282,800

(+66,000)

56,700

(+10,600)

12,900

(-24,400)

352,400

(+52,200)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 4 Change
  $134.85 –   $4.06

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 8 Change
600-700 lbs. $155.01 –   $1.06
700-800 lbs. $143.04 –   $0.61
800-900 lbs. $133.44 –   $2.04

South Central

Steers-Cash Mar. 8 Change
500-600 lbs. $164.47 +  $0.01
600-700 lbs. $146.05 –   $1.14
700-800 lbs. $135.31 –   $3.06

Southeast

Steers-Cash Mar. 8 Change
400-500 lbs. $164.62 + $3.28
500-600 lbs. $150.78 + $2.41
600-700 lbs. $137.14 + $1.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 5 ($/cwt) Change
Choice $231.33 –  $9.20
Select $220.85 –  $8.88
Ch-Se Spread $10.48 –  $0.32

 

Futures

Feeder Cattle  Mar. 5 Change
Mar $134.600 –  $4.075
Apr $139.025 –  $3.550
May $145.150 +  $0.075
Aug $153.725 +  $1.775
Sep $154.825 +  $2.000
Oct  $155.375 +  $2.175
Nov $155.650 +  $2.425
Jan ’22 $154.850 +  $3.200

 

Live Cattle   Mar. 5 Change
Apr $119.025 –   $0.975
Jun $118.000 –   $0.425
Aug $117.075 +  $0.025
Oct $121.450 +  $0.825
Dec $124.475 +  $1.150
Feb ’22 $126.900 +  $1.325
Apr $128.125 +  $1.325
Jun $122.500 +  $1.500
Aug $121.125 +  $0.625

 

Corn  Mar. 5 Change
Mar ’21 $5.620 + $0.066
May $5.454 –  $0.020
Jly $5.340 –  $0.010
Sep $4.990 + $0.096
Oct $4.814 + $0.108
Mar ’22 $4.890 + $0.106

 

Oil CME-WTI Mar. 5 Change
Apr $66.09 + $4.59
May $65.92 + $4.69
Jun $65.45 + $4.71
Jly $64.81 + $4.69
Aug $64.07 + $4.61
Sep $63.30 + $4.49

Equities

Equity Indexes Mar. 5 Change
Dow Industrial Average  31496.20 +    563.93
NASDAQ  12920.15 –      272.19
S&P 500    3841.94 +       30.79
Dollar (DXY)         91.99 +           1.11
Cattle Current Weekly Highlights—Week ending March 5, 2021 2021-03-20T13:13:07-05:00

Cattle Current Weekly Highlights—Week ending Feb. 26, 2021

Based on the weekly auctions monitored by Cattle Current last week, demand was strongest for lighter cattle suitable for summer grazing.

“The strengthening prices at the local level are being spurred by two factors at this point. The primary driver of lightweight calf prices is grass fever. Grass is slowly beginning to green; some marginal growth is evident in fescue pastures, while cool season annuals should really take off over the next couple of weeks,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The strengthening price is not based on what grass is available but what is expected to be available. Thus, this is just the start of the price run as some producers are attempting to get a few cattle purchased before prices peak.”

Summer and fall Feeder Cattle futures are the other current price driver, according to Griffith.

“If the summer and fall contract months remain at current levels or push higher, then one can expect calf prices to continue to increase over the next six to eight weeks,” Griffith says. “There does appear to be some disconnect between Feeder Cattle futures and Corn futures, but there is no reason to try to outguess that disconnect. The key is to take advantage of what the market is offering and capitalize on prices in the near term.”

In the meantime, higher feed costs continue to challenge Feeder Cattle futures overall. They closed an average of $1.57 lower week to week on Friday, from 10¢ lower to $2.77 lower. 

Week to week on Friday, Corn futures closed an average of 8¢ higher through the front six contracts.

Week to week on Friday, Soybean futures closed an average of 25¢ higher through the front six contracts.

“Tight global stocks and export demand for grain, oilseeds, and cotton continue to drive prices higher,” says Aaron Smith, Extension crop marketing specialist at the University of Tennessee, in his weekly Crop Comments. “China has been the major purchaser of U.S. agricultural products, however demand from other countries has also been robust…Brazil’s soybean harvest continues to be two to three weeks behind normal pace, limiting exports of soybeans to global purchasers. The cold weather across the Southern Plains last week has many concerned that winter kill could affect hard red winter wheat production.”

CattleFax analysts expect cattle prices to improve significantly after markets wade through currently plentiful fed cattle supplies.

Second-Half Optimism

Kevin Good, CattleFax vice president of industry relations and analysis sees this year shaping up as a tale of two halves, with prices continuing to struggle through the first two quarters and then finding plenty of lift in the second half of the year.

During its Market Outlook Wednesday, as part of the National Cattlemen’s Beef Association Winter Reboot, Good explained leverage will begin swinging back in producers’ favor as packing plant capacity utilization declines with smaller cattle harvest supplies.

CattleFax projects modest herd liquidation of 200,000 beef cows this year and 350,000 head next year, due in part to the likelihood of expanding La Niña drought this spring and summer.

In terms of price expectations, CattleFax projects:

  • Annual average steer calf price (550 lbs.) at $170/cwt., with a range of $160-$180.
  • Annual average feeder steer price (800 lbs.) at $145 with a range of $135-$160.
  • Annual average fed steer price at $119 with a range of $108-$128.
  • Annual average utility cow price at $64 with a range of $52 to $74.                 
  • Annual average bred cow price at $1,600/hd with a range of $1,200 to $1,900.

At the same time, CattleFax expects consumer beef demand to continue strong.

According to Randy Blach, CattleFax CEO, domestic consumer beef demand last year was the strongest in more than 30 years, based on the U.S. Consumer Beef Demand Index. That was helped by consumer incomes being replaced almost entirely by government stimulus.

Internationally, CattleFax expects U.S. beef exports to increase at least 5% this year.

There are headwinds, of course.

Even before considering the drought, Mike Murphy, CattleFax vice president of research and risk management services, said both supply and demand mean feed costs will likely remain elevated into the next crop marketing year.

Fed Cattle Struggle for Steady

As it is, last week was a tooth-pulling contest for negotiated cash fed cattle prices to end up generally steady. Live trade was steady with the previous week in Nebraska and the Southern Plains at $114/cwt.; steady to $1 lower at $114 in the western Corn Belt. Dressed trade was steady to $2 higher at $182.

Week to week on Friday, Live Cattle futures an average of $1.65 lower, from 72¢ lower to $3.65 lower toward the front.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” explains Derrell Peel, Extension livestock marketing specialist, in his weekly market comments. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

Feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed report. That was about 3% more year over year.  

“This is a difficult environment to market finished cattle,” Griffith says. “Nothing seems to be in tune with normal tendencies. A negative basis of $2 to $3 is not unheard of in February, but it is also not that common. Cattle feeders will be hoping for cash and futures prices to converge moving into the April contract as convergence is advantageous to hedging strategies.”

Choice boxed beef cutout value was $1.30 higher week to week on Friday at $240.53/cwt. Select was $1.83 higher at $229.73.

Friday to Friday Change

Weekly Auction Receipts

Feb. 27 Auction Direct

Video/net

Total
 

216,800

(+139,200)

46,100

(+27,800)

37,300

(+35,400)

300,200

(+202,400)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 25 Change
  $138.911 +  $0.80

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 27 Change
600-700 lbs. $156.07 +  $0.92
700-800 lbs. $144.73 –   $0.71
800-900 lbs. $135.48 –   $1.94

South Central

Steers-Cash Feb. 27 Change
500-600 lbs. $164.46 +  $10.75
600-700 lbs. $147.19 –   $0.35
700-800 lbs. $138.37 +  $1.42

Southeast

Steers-Cash Feb. 27 Change
400-500 lbs. $161.34 + $7.83
500-600 lbs. $148.37 + $3.89
600-700 lbs. $135.87 + $2.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 26 ($/cwt) Change
Choice $240.53 + $1.30
Select $229.73 + $1.83
Ch-Se Spread $10.80 –  $0.53

 

Futures

Feeder Cattle  Feb. 26 Change
Mar $138.675 –  $0.450
Apr $142.575 –  $0.100
May $145.075 –  $0.650
Aug $151.950 –  $1.950
Sep $152.825 –  $2.175
Oct  $153.200 –  $2.350
Nov $153.225 –  $2.775
Jan ’22 $151.650 –  $2.150

 

Live Cattle   Feb. 26 Change
Feb $113.100 –  $2.825
Apr $120.000 –  $3.675
Jun $118.425 –  $2.100
Aug $117.050 –  $1.375
Oct $120.625 –  $0.725
Dec $123.325 –  $1.300
Feb ’22 $125.575 –  $1.000
Apr $126.800 –  $0.800
Jun $121.000 –  $1.100

 

Corn  Feb. 26 Change
Mar ’21 $5.554 + $0.128
May $5.474 + $0.058
Jly $5.350 + $0.020
Sep $4.894 + $0.078
Oct $4.706 + $0.106
Mar ’22 $4.784 + $0.108

 

Oil CME-WTI Feb. 26 Change
Apr $61.50 + $2.24
May $61.23 + $2.17
Jun $60.74 + $2.08
Jly $60.12 + $2.00
Aug $59.46 + $1.94
Sep $58.41 + $1.89

Equities

Equity Indexes Feb. 26 Change
Dow Industrial Average  30932.37 –      561.95
NASDAQ  13192.34 –      681.12
S&P 500    3811.15 –        95.56
Dollar (DXY)         90.93 +         0.57
Cattle Current Weekly Highlights—Week ending Feb. 26, 2021 2021-03-01T15:45:10-05:00

Cattle Current Weekly Highlights—Week ending Feb. 19, 2021

Frigid, record-breaking temperatures, ice and snow across a wide swath of the nation slowed cattle movement and disrupted supply chains last week, especially in the Southern Plains.

With so many auctions closed last week, due to weather, and receipts reduced at others, it was tough to come up with much of a price trend. Based on the auctions monitored by Cattle Current, prices were mixed but generally steady to higher.

Optimism this week may be tempered as the nation thaws, with the potential for feedlots to slow marketing in efforts to recover some of the lost gain, and with more January placements than expected (see below).

Week to week on Friday, Feeder Cattle futures closed mixed, from an average of $1.45 lower in the front three contracts to an average of 57¢ higher. 

The CME Feeder Cattle Index was $2.77 higher week to week on Thursday at $138.11, the highest since December.

“There is optimism for feeder cattle to gain momentum, but much of this optimism is pushed towards the summer and fall feeder cattle market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Summer and fall Feeder Cattle contracts are trading at a clear $10 premium to spring contracts. Thus, the optimism is for five to six months in the future. Producers should keep an eye on the Feeder Cattle Index and deferred futures and price cattle accordingly.”

USDA’s Economic Research Service (ERS) lowered expectations for feeder steer prices, in the latest Livestock, Dairy and Poultry Outlook.

“Feeder steer prices for January 2021 averaged $133.94/cwt. for steers weighing 750-800 lbs. sold at Oklahoma City National Stockyards, about 7% below the average for January 2020. With prices for the first two weeks of February almost $7 below the same month last year, the first-quarter 2021 forecast was lowered $2 to $132/cwt.,” say ERS analysts. “Revisions to the 2020 calf crop tightened anticipated feeder cattle supplies in second-half 2021. However, higher expected feed costs offset expectations for stronger prices the rest of the year; as a result, the second-half 2021 feeder steer price forecasts are unchanged from last month.”

ERS forecasts the feeder steer price at $134/cwt. in the second quarter, $139 in the third and $140 in the fourth quarter for an annual average of $136.25. That would be only 80¢ more than the 2020 average.

Feedlot Placements Up

Traders may view the latest monthly Cattle on Feed report as somewhat bearish, with January placements of 2.017 million head. That was about 3% more year over year and about 3% more than pre-report expectations. The report accounts for feedlots with 1,000 head or more capacity.

“With higher placements in January, rising feed costs are likely to become more of a focus and concern,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The weekly Omaha corn price for January averaged $5.04/bu., which is a 15.2% ($0.67 per bushel) rise over December 2020 and 32.0% ($1.23 per bushel) higher than last year. High feed costs may incentivize cow-calf operators to add more weight to calves before placing into feedlots. This may be a challenge as much of the western U.S. remains in drought, potentially limiting available pasture and feed supplies. The harsh winter weather in mid-February likely depleted hay stocks in some areas.”

Feedlot marketings in January of 1.822 million head were 5.6% less year over year and slightly fewer than expected.

Total cattle on feed Feb. 1 of 12.106 million head were 1.5% more than a year earlier and about 0.5% more than expectations. That’s the second most for the month since the data series began in 1996.

Fed Cattle Prices Mainly Steady

Negotiated cash fed cattle trade last week ended up steady in the Southern Plains at $114/cwt., according to the Agricultural Marketing Service. Live trades were steady to $1 higher in Nebraska at $114; dressed trade steady to $1 higher at $180-$181. In the western Corn Belt, prices were steady to $2 higher on a live basis at $114-$115 and steady to $2 higher in the beef at $180-$182.

Through Thursday, the five-area direct average steer price was $114.11/cwt. on a live basis, which was 33¢more than the previous week but $5.66 lower than the same week last year. The average five-area dressed steer price was 64¢ higher week to week at $180.71, which was $9.39 less year over year.

Week to week on Friday, Live Cattle futures closed mixed, from an average of $1.07 lower through the front five contracts to an average of 80¢ higher.

“The weather conditions many feedlot operators are navigating currently have a small impact on cattle soon to be marketed and a much larger impact on the rest of the animals,” Griffith explains. “The cold temperatures are sure to reduce average daily gain and increase feed intake. Thus, the higher cost of feed and fewer pounds to sell will negatively influence profitability. This does not mean those cattle will lose money, but profits will be smaller. Looking ahead, cattle feeders will be looking to gain some leverage from this situation moving into the spring to push prices north of $120.”

Wholesale Beef Prices Climb

Reduced slaughter last week, due to the weather, demonstrated once again the disparate forces of marginal demand: packer demand for fed cattle decreased, while retailers and food service competed harder for reduced beef production.

Choice boxed beef cutout value was $6.86 higher week to week on Friday at $239.23/cwt. Select was $6.97 higher at $227.90.

Estimated cattle slaughter for the week of 552,000 head was 56,000 head fewer than the previous week and 74,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.50 million head is 263,000 head fewer (-5.52%) than last year. Estimated year-to-date beef production of 3.81 billion lbs. is 124.8 million lbs. less (-3.17%) than the same time last year.

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 20 Auction Direct

Video/net

Total
 

77,600

(-52,900)

18,300

(-22,800)

1,900

(-34,800)

97,800

(-110,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 18 Change
  $138.11 +  $2.77

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Last available

North Central

Steers-Cash Feb. 15 Change
600-700 lbs. $151.50 +  $0.46
700-800 lbs. $140.64 –   $0.50
800-900 lbs. $134.59 +  $0.965

South Central

Steers-Cash Feb. 15 Change
500-600 lbs. $155.23 –   $4.37
600-700 lbs. $140.98 –   $3.69
700-800 lbs. $134.01 –   $1.17

Southeast

Steers-Cash Feb. 15 Change
400-500 lbs. $154.99 –   $5,42
500-600 lbs. $141.66 –   $3.05
600-700 lbs. $132.20 + $0.07

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 19 ($/cwt) Change
Choice $239.23 + $6.86
Select $227.90 + $6.97
Ch-Se Spread $11.33 –  $0.11

 

Futures

Feeder Cattle  Feb. 19 Change
Mar $139.125 –  $1.725
Apr $142.675 –  $2.050
May $145.725 –  $0.575
Aug $153.900 + $0.300
Sep $155.000 + $0.325
Oct  $155.550 + $0.425
Nov $156.000 + $0.725
Jan ’22 $153.800 + $1.100

 

Live Cattle   Feb. 19 Change
Feb $115.925 –  $1.275
Apr $123.675 –  $1.500
Jun $120.525 –  $0.775
Aug $118.425 –  $1.250
Oct $121.350 –  $0.575
Dec $124.625 + $0.520
Feb ’22 $126.575 + $1.000
Apr $127.600 + $1.150
Jun $122.100 + $0.550

 

Corn  Feb. 19 Change
Mar ’21 $5.426 + $0.040
May $5.416 + $0.052
Jly $5.330 + $0.080
Sep $4.816 + $0.094
Oct $4.600 + $0.114
Mar ’22 $4.676 + $0.122

 

Oil CME-WTI Feb. 19 Change
Mar $59.24 –  $0.23
Apr $59.26 –  $0.12
May $59.06 unchanged
Jun $58.66 + $0.06
Jly $58.12 + $0.07
Aug $57.52 + $0.06

 

Equities

Equity Indexes Feb. 19 Change
Dow Industrial Average  31494.32 +      35.92
NASDAQ  13874.36 –      221.11
S&P 500    3906.71 –        28.12
Dollar (DXY)         90.34 –          0.14
Cattle Current Weekly Highlights—Week ending Feb. 19, 2021 2021-02-26T14:31:23-05:00

Cattle Current Weekly Highlights—Week ending Feb. 12, 2021

Based on weekly auctions monitored by Cattle Current, calves and feeder cattle traded mixed last week, supported by positive fundamentals but pressured by the frigid, icy weather that disrupted some markets.

Week to week on Friday, Feeder Cattle futures closed an average of $1.29 higher from 17¢ higher at the back to $2.57 higher at the front. Slightly softer Corn futures prices provided support.

Week to week on Friday, Corn futures closed an average of 7¢ lower through the front six contracts.

The latest monthly World Agricultural Supply and Demand Estimates (WASDE), from USDA’s Economic Research Service increased the expected 2020-21 season-average corn price received by producers by 10¢ to $4.30/bu. 

“The futures price expectation for feeder cattle remains a bright spot, as the market appears to be strong in the summer and fall months for moving cattle into the feedlot,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Most feeder cattle contracts are holding near the contract highs. This does not mean they will stay there, nor does it mean the market price will increase or decrease. All it means at this point is that optimism remains in the feeder cattle market…There are still several weeks before spring forage growth hits full speed. Thus, there should still be several more weeks before lightweight calf prices peak. However, the cost of holding those calves for four to eight more weeks should be considered.”

Cash Fed Cattle Trade Steady to Higher

Negotiated cash fed cattle trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher).

“The cash price remains $2 lower than the February Live Cattle contract, and there are two weeks left to close the gap,” Griffith says. “The more optimistic part of the market is April Live Cattle trading near $125. The ability to reach or surpass this price level is dependent on beef demand. Beef supply may play a role as well if the extremely cold temperatures persist and result in reduced cattle performance in the feedlot.”

The average dressed steer weight the week ending Jan. 30 was 920 lbs., which was 6 lbs. lighter than the previous week but 23 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 853 lbs. was 2 lbs. heavier than the prior week and 20 lbs. heavier than the previous year.

USDA projects $115/cwt. for the annual average five-area direct fed steer price this year. Average prices are forecast at $113 in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter.

Increased Beef Production Expected

Choice boxed beef cutout value was $2.21 lower week to week on Friday at $232.37/cwt. Select was 14¢ higher at $220.93.

Beef production for this year was estimated at 27.54 billion lbs., in the latest WASDE. That would be 388 million lbs. more (+1.43%) than last year.

Along with expected continued strong domestic beef demand, the latest U.S. beef export data suggests rebounding international markets.

Although U.S. beef exports were 5% lower last year, in volume (1.25 million metric tons—mt) and value ($7.65 billion), they finished 2020 with a near record December, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

December beef exports totaled 119,892 mt, up 8% from December 2019 and the largest in nearly 10 years. Export value in December was $744 million, up 9% from a year ago and the second highest total on record.

Foodservice restrictions in many major markets impacted beef exports significantly, but they trended higher late in the year, bolstered by very strong retail and holiday demand.

“Consumers across the world responded to the COVID-19 pandemic by seeking high-quality products they could enjoy at home, and U.S. beef and pork definitely met this need,” Says Dan Halstrom, USMEF president and CEO. “We expect these retail and home-delivery demand trends to continue even as sit-down restaurant dining recovers, creating robust opportunities for U.S. red meat export growth.”

“The weekly beef export muscle cut data for the first five weeks of 2021 are on par with the strong start in 2020, which bodes well for exporting beef and thus price support. However, the domestic beef market is the primary driver of the industry,” Griffith says.

Friday to Friday Change

Weekly Auction Receipts

Feb. 15 Auction Direct

Video/net

Total
 

130,500

(-94,600)

41,100

(+6,900)

36,700

(+25,800)

208,300

(-61,900)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 11 Change
  $135.34 –  $0.31

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 15 Change
600-700 lbs. $151.50 +  $0.46
700-800 lbs. $140.64 –   $0.50
800-900 lbs. $134.59 +  $0.965

South Central

Steers-Cash Feb. 15 Change
500-600 lbs. $155.23 –   $4.37
600-700 lbs. $140.98 –   $3.69
700-800 lbs. $134.01 –   $1.17

Southeast

Steers-Cash Feb. 15 Change
400-500 lbs. $154.99 –   $5,42
500-600 lbs. $141.66 –   $3.05
600-700 lbs. $132.20 + $0.07

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 12 ($/cwt) Change
Choice $232.37 –  $2.21
Select $220.93 + $0.14
Ch-Se Spread $11.44 –  $2.35

 

Futures

Feeder Cattle  Feb. 12 Change
Mar $140.850 + $2.575
Apr $144.725 + $2.525
May $146.300 + $1.525
Aug $153.600 + $1.250
Sep $154.675 + $1.200
Oct  $155.125 + $0.925
Nov $155.275 + $0.175
Jan ’22 $152.700 + $0.175

 

Live Cattle   Feb. 12 Change
Feb $117.200 + $0.475
Apr $125.175 + $1.400
Jun $121.300 + $1.325
Aug $119.675 + $1.175
Oct $121.925 + $0.775
Dec $124.100 + $0.550
Feb ’22 $125.575 + $0.475
Apr $126.450 + $0.450
Jun $121.550 + $0.450

 

Corn  Feb. 12 Change
Mar ’21 $5.386 –  $0.098
May $5.364 –  $0.110
Jly $5.250 –  $0.112
Sep $4.772 –  $0.060
Oct $4.486 –  $0.030
Mar ’22 $4.554 –  $0.032

 

Oil CME-WTI Feb. 12 Change
Mar $59.47 + $2.62
Apr $59.38 + $2.68
May $59.06 + $2.66
Jun $58.60 + $2.59
Jly $58.05 + $2.49
Aug $57.46 + $2.39

 

Equities

Equity Indexes Feb. 12 Change
Dow Industrial Average  31458.40 +     310.16
NASDAQ  14095.47 +     239.17
S&P 500    3934.83 +      48.00
Dollar (DXY)         91.45 –          0.55
Cattle Current Weekly Highlights—Week ending Feb. 12, 2021 2021-02-19T17:56:09-05:00

Cattle Current Weekly Highlights—Week ending Feb. 5, 2021

Based on weekly auctions monitored by Cattle Current, calves and feeder cattle sold mixed last week, with overall demand strongest for lighter weights that can be steered to summer grass programs.

More specifically, calves and feeder cattle sold from $2/cwt. lower to $2 higher at auctions in the North Central and South Central regions last week, according to the Agricultural Marketing Service (AMS). Prices were $1 to $4 higher in the Southeast.

“Lightweight calf prices are beginning to catch fire, even before there are any signs of spring greening. This bodes well for the calf market moving through February and March,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The higher calf prices would indicate that stocker producers believe feeder cattle prices will be much stronger moving through the summer months, which is exactly what futures traders are banking on right now. With two months of grass cattle buying ahead of the market, there is ample time for 500 lb. steer values to push higher than the $800 per head mark. Heifers of similar weight will likely push toward $700 per head at the same time. Thus, many operations will view this as a profitable price level as it relates to variable cash expenses. There is potential for the value of these animals to move higher than what is stated, but that is more of a timing issue than anything else.”

Week to week on Friday, Feeder Cattle futures closed an average of $2.41 higher from 55¢ higher in spot Mar to $4.70 higher toward the back, recovering about half of the previous week’s losses. Support included a pause to the run higher by grain futures.

Week to week on Friday, Corn futures closed narrowly mixed from fractionally lower to 8¢ higher through the front six contracts.

USDA releases monthly World Agricultural Supply and Demand Estimates on Tuesday, which could add price volatility.

Higher outside markets, tied to increasing COVID-19 vaccinations and hopes of reopening the economy provided overall market support, as did more positive supply fundamentals from the second quarter onward.

“The number of steers and heifers going through our packing plants over the course of the next several years is going to shrink. As it declines, so will our beef production, and prices are going to get higher. We’ll see a transition to a higher trending, more profitable cow-calf operator, feedstock operator and cattle feeder,” said Randy Blach, CattleFax CEO, at last week’s annual International Livestock Forum hosted by Colorado State University and the National Western Stock Show

At the same time, Blach expects consumer beef demand to continue near last year’s extraordinary pace. It was the most in 30 years, according to Blach, based on the Annual U.S. Consumer Beef Demand Index, which was near 180 in 2020, compared to just over 160 the previous year. That was with record beef, pork and poultry production.

“That speaks to the quality of the product that we’re producing in this country,” Blach says. He explained Prime and Choice beef production increased from approximately 11 to 12 billion lbs. in the early 2000s to around 18 billion lbs. last year.

Along the way, the Choice-Select spread maintained its strong pace, while the spread between Choice and the upper two-thirds of Choice grew. The Prime-Choice spread sagged this year due to the dearth of restaurant business.

Fed Cattle Prices Edge Higher

Negotiated cash fed cattle prices last week were mainly $1-$2 higher on a live basis at $114/cwt. in the Southern Plains, mostly $114 in Nebraska and at $112-$114 in the western Corn Belt, according to the AMS. Dressed trade was steady to $2 higher at $178-$180.

Week to week on Friday, Live Cattle futures closed an average of $1.80 higher, erasing the previous week’s decline.

“The futures market is pricing in a strong spring rally for finished cattle with April Live Cattle futures a full $10 higher than current cash prices,” Griffith says. “Essentially, the April futures contract is pricing in a 9% price increase over the next 12 weeks. This may be the information cattle feeders are using to bid for feeder cattle, but there remains the expectation of higher feed costs persisting. The market has a long way to go to reach projections.”

Beef Prices Begin to Stall

Recently resurgent wholesale beef prices showed signs of hitting the seasonal wall last week. Choice boxed beef cutout value was 63¢ higher week to week on Friday at $234.58/cwt. Select was $1.91 lower at $220.79.

“Most purveyors of the beef market likely expect beef prices to soften in February, and possibly into March, as these two months tend to experience soft demand,” Griffith says. “Such a decline would lead into another escalation of prices as grilling season hits. It is difficult to know how consumers will respond, with many restaurants remaining closed or at reduced capacity. If restaurants move toward full capacity at any point, one could expect consumers to be hesitant at first but also eager to dine in such restaurants. Another unknown will be summer sports such as baseball, where a considerable quantity of beef is consumed. Given the information for how the market responded in 2020, beef prices are likely to remain strong in 2021. As demand goes so will prices.”

Friday to Friday Change

Weekly Auction Receipts

Feb. 8 Auction Direct

Video/net

Total
 

225,100

(+31,000)

34,200

(-25,800)

10,900

(-27,400)

270,200

(-22,000)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 4 Change
  $135.65 –  $0.37

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 8 Change
600-700 lbs. $151.04 –   $2.59
700-800 lbs. $141.14 –   $1.20
800-900 lbs. $133.63 –   $1.50

South Central

Steers-Cash Feb. 8 Change
500-600 lbs. $159.60 +  $0.95
600-700 lbs. $144.67 +  $2.29
700-800 lbs. $135.18 +  $0.65

Southeast

Steers-Cash Feb. 8 Change
400-500 lbs. $160.41 + $4.12
500-600 lbs. $144.71 + $2.65
600-700 lbs. $132.13 –  $1.63

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 5 ($/cwt) Change
Choice $234.58 + $0.63
Select $220.79 –  $1.91
Ch-Se Spread $13.79 + $2.54

 

Futures

Feeder Cattle  Feb. 5 Change
Mar $138.275 + $0.550
Apr $142.200 + $1.450
May $144.775 + $2.100
Aug $152.350 + $2.400
Sep $153.475 + $2.725
Oct  $154.200 + $3.550
Nov $155.100 + $4.700
Jan ’22 $152.525 + $1.825

 

Live Cattle   Feb. 5 Change
Feb $116.725 + $1.675
Apr $123.775 + $1.925
Jun $119.975 + $2.375
Aug $118.500 + $2.000
Oct $121.150 + $1.625
Dec $123.550 + $1.625
Feb ’22 $125.100 + $2.000
Apr $126.000 + $1.750
Jun $121.100 + $1.200

 

Corn  Feb. 5 Change
Mar ’21 $5.484 + $0.014
May $5.474 -0-
Jly $5.362 –  $0.002
Sep $4.782 + $0.080
Oct $4.516 + $0.064
Mar ’22 $4.586 + $0.084

 

Oil CME-WTI Feb. 5 Change
Mar $56.85 + $4.65
Apr $56.70 + $4.62
May $56.40 + $4.52
Jun $56.01 + $4.38
Jly $55.56 + $4.22
Aug $55.07 + $4.07

 

Equities

Equity Indexes Feb. 5 Change
Dow Industrial Average  31148.24 +   1165.62
NASDAQ  13856.30 +     785.60
S&P 500    3886.83 +     172.59
Dollar (DXY)         91.00 +        0.02
Cattle Current Weekly Highlights—Week ending Feb. 5, 2021 2021-02-08T19:57:10-05:00

Cattle Current Weekly Highlights—Week ending Jan. 29, 2021

Nationwide, calves and feeder cattle sold $1 to $3/cwt. higher last week, according to the Agricultural Marketing Service.

Week to week on Friday, Feeder Cattle futures closed an average of $4.35 lower ($2.75 to $6.42 lower), not counting recently minted Jan.

“The current uptick in the market may be the beginning of the grass cattle run in prices that will extend into April,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the positive price movement for grass cattle in the spring generally does not gain significant traction until the middle or late February. Thus, if this is the beginning of the spring calf run, then the current price increase may bode well for a strong spring market.”

The CME Feeder Cattle Index was $2.03 higher week to week on Thursday at $136.02.

Griffith adds continued strength in cash calf and feeder cattle prices requires ongoing support from the futures market. “The upside potential for 500-600 lb. steers this spring (TN) is around $155/cwt.,” he says. 

At the same time, though apparently adequate overall, hay supplies are tighter.

“Drought persisted across much of the west in 2020 and has extended into much of the Great Plains at the current time. Several states reveal the impact of the drought on hay production, supplies and the challenges for cattle producers in those regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Fed Cattle at $112-$113

Negotiated cash fed cattle trade last week traded above $112/cwt. for the first time in months. Live prices in the Northern Plains were $3-$4 higher at $113/cwt. and $2-$7 higher in the western Corn Belt at $112. Dressed trade in Nebraska was $5 higher at $178. Elsewhere, established trade had yet to develop through Friday afternoon, according to the Agricultural Marketing Service. On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Week to week on Friday, Live Cattle futures closed an average of $1.36 lower (65¢ to $1.80 lower).

Wholesale beef prices continue to provide solid support.

Choice boxed beef cutout value was $11.13 higher week to week on Friday at $233.95/cwt. Select was $9.36 higher at $222.70. That’s $21.03 higher for Choice over the last two weeks and $19.62 higher for Select.

“Winter is known for strong roast demand, but it is evident that consumers are still looking for steaks in the current market,” Griffith says. “This seems to be a trend that is becoming more pronounced year after year. In other words, consumers may be shifting some of their seasonal beef demand habits. With the composite Choice boxed beef price already over $230, there is a chance that the weekly apex for Choice boxed beef this spring could move as high as $250.”

Griffith notes prices increased at least 16% since the beginning of the year for the short loin, strip loin, and top inside round.

Beef Cow Herd Declines Slightly

The nation’s beef cow herd began this year with 31.16 million head, according to the semi-annul Cattle report from USDA on Friday. That’s 181,000 head fewer or 0.58% less than the previous year.

The number of beef heifers retained for replacement of 5.81 million head was 3,200 head more than the previous year, just 0.06% more.

As of Jan. 1, the calculated number of calves outside feedlots was 25.66 million head, which were 62,000 head fewer (-0.24%) than a year earlier.

Milk cows Jan. 1 of 9.44 million head were 97,400 (+1.04%) more than the previous year.

The inventory of all cattle and calves was estimated at 93.59 million head, down 198,000 (-0.21%) from a year earlier.

Friday to Friday Change

Weekly Auction Receipts

Last available

Feb. 1 Auction Direct

Video/net

Total
 

194,100

(-112.200)

60,000

(-13,300)

38,300

(+31,600)

292,400

(-93,900)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 28 Change
  $136.02 + $2.03

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 1 Change
600-700 lbs. $153.63 +  $4.20
700-800 lbs. $142.34 +  $1.50
800-900 lbs. $135.13 +  $1.30

South Central

Steers-Cash Feb. 1 Change
500-600 lbs. $158.65 +  $2.42
600-700 lbs. $142.38 +  $2.42
700-800 lbs. $134.53 +  $1.84

Southeast

Steers-Cash Feb. 1 Change
400-500 lbs. $156.29 + $2.44
500-600 lbs. $142.06 + $2.68
600-700 lbs. $133.76 + $4.89

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 29 ($/cwt) Change
Choice $233.95 + $11.13
Select $222.70 + $9.36
Ch-Se Spread $11.25 + $1.77

 

Futures

Feeder Cattle  Jan. 29 Change
Mar $137.725 –  $6.425
Apr $140.750 –  $5.375
May $142.375 –  $4.650
Aug $149.950 –  $2.750
Sep $150.750 –  $3.325
Oct  $150.650 –  $3.900
Nov $150.400 –  $4.000
Jan ’22 $150.400 n/a

 

Live Cattle   Jan.29 Change
Feb $115.050 –  $1.675
Apr $121.850 –  $0.675
Jun $117.600 –  $1.200
Aug $116.500 –  $1.775
Oct $119.525 –  $1.800
Dec $121.925 –  $1.550
Feb ’22 $123.100 –  $1.550
Apr $124.250 –  $1.350
Jun $119.900 –  $0.650

 

Corn  Jan. 29 Change
Mar ’21 $5.470 + $0.466
May $5.474 + $0.444
Jly $5.364 + $0.378
Sep $4.702 + $0.188
Oct $4.452 + $0.150
Mar ’22 $4.502 + $0.128

 

Oil CME-WTI Jan. 29 Change
Mar $52.20 –  $0.07
Apr $52.08 –  $0.11
May $51.88 –  $0.16
Jun $51.63 –  $0.19
Jly $51.34 –  $0.20
Aug $51.00 –  $0.24

 

Equities

Equity Indexes Jan. 29 Change
Dow Industrial Average  29982.62 –    1014.36
NASDAQ  13070.70 –      472.36
S&P 500   3714.24 –       127.23
Dollar (DXY)       90.53 +          0.29
Cattle Current Weekly Highlights—Week ending Jan. 29, 2021 2021-02-02T13:00:06-05:00

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