Weekly Market Highlights

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 2019-09-15T14:28:23-05:00

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 2019-09-08T13:24:25-05:00

Cattle Current Weekly Highlights—Week ending Aug. 30, 2019

Cattle markets started the week with some bounce from news about the U.S. trade deal with Japan and a neutral to friendly monthly Cattle on Feed report. However, Cattle futures faltered as the week wore on, with wholesale beef values adjusting lower toward pre-fire levels and with holiday beef buying in the rearview mirror.

Steer and heifer calves sold mostly steady to $5/cwt. higher, while yearlings traded steady to $3 lower, according to the Agricultural Marketing Service (AMS). 

“With the CME cattle board displaying a gloomy outlook the last quarter, demand for big yearlings off grass was good at the few locations that had several load lots on hand,” say AMS analysts. 

At the same time, sellers are less than eager to accept current prices. For instance at Superior’s Big Horn Classic video auction the previous week, with 208,800 head on offer, the AMS reporter noted some consignors moved cattle to the next sale or passed on the bids.

“Given the lower placement numbers for July, based on the August Cattle on Feed report, one could probably surmise that there are several feeder cattle that will be coming to market in September and October,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “If corn prices remain relatively low and beef demand remains steady, then yearling type cattle prices should remain steady the next several weeks before succumbing to a downtrend.”

Feeder Cattle futures closed an average of $1.91 lower week to week on Friday (87¢ lower in spot Sep to $2.40 lower).

Although a sense of normalcy is returning, there’s still plenty of uncertainty remaining after the Aug. 9 fire that temporarily shuttered the Tyson plan at Holcombe, KS.

“While the impacts of the Tyson plant fire will likely diminish relatively quickly in the next few weeks, feeder cattle markets are still nervous and defensive about the corn market situation, increasingly shaky macroeconomic conditions and continued global economic turmoil,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The uncertainty and volatility impacting feeder cattle markets is likely to continue this fall and winter. This increases the risks of winter stocker production but may also present short term opportunities for either buying or selling cattle or both,” Peel says. “The best advice at this point is to evaluate and reevaluate possibilities frequently and remain as nimble as possible both offensively and defensively.”

Cash Fed Cattle Prices Sink

Negotiated cash fed cattle prices lost ground as the week progressed. They ended up $3/cwt. lower in the Southern Plains last week at $103/cwt. Live trades were $2-$3 lower in Nebraska at $104-$106 and steady to $5 lower in the western Corn Belt at $105-$110. Dressed sales in Nebraska were $6-$10 lower at $165-$172; $3-$7 lower in the western Corn Belt at mostly $171.

“The market is down one large harvest facility,” Griffith says. “Cattle feeders cannot feed the same animal for infinity and beyond. Availability of feeder cattle will increase in the near term. All of this information results in packers continuing to put the squeeze on cattle feeders as they appear to be holding all of the leverage. It is difficult to identify any leverage point cattle feeders control in today’s market, but this situation will not last forever.”

Except for 37¢ higher in expiring Aug and 45¢ higher in the back contract, Live Cattle futures closed an average of 57¢ lower week to week on Friday.

Although feedlot marketing remained aggressive last month, the estimated supply of cattle on feed more than 120 days was 0.7% more than the previous year, according to Brenda Boetel, a livestock economist at the University of Wisconsin-River Falls.

“Total cattle on feed inventory saw the largest July-to-August decline since 2008,” Boetel explains in the most recent In the Cattle Markets. “Although cattle are currently being marketed in a timely manner, there is danger that this pace will slow and currentness will slip. Given the decrease in slaughter capacity due to the Tyson fire, Saturday slaughter will need to continue to keep the market current. Keeping up with the increased supply in the fourth quarter will be a challenge.”

Choice boxed beef cutout value was $5.75 lower week to week on Friday afternoon at $231.77/cwt. Select was 44¢ lowerat $212.27. Compared to the Friday of the Tyson fire, that’s still $15.40 more Choice and $18.46 more for Select.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 30

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

150,400

(+150,400)

58,600

(-6,300)

211,800

(+145,900)

420,800

(+202,600)

 

CME Feeder Index

CME Feeder Index* Aug. 29 Change
  $138.55 –  1.17

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 30 Change
600-700 lbs. $153.92 –  $6.45
700-800 lbs. $146.58 –  $5.52
800-900 lbs. $142.206 –  $3.46

 

South Central

Steers-Cash Aug. 30 Change
500-600 lbs. $150.35 + $1.06
600-700 lbs. $146.12 + $1.46
700-800 lbs. $141.71 + $1.62

 

Southeast

Steers-Cash Aug. 30 Change
400-500 lbs. $145.89 + $1.16
500-600 lbs. $138.79 + $2.52
600-700 lbs. $134.01 + $2.05

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 30 ($/cwt) Change
Choice $231.77 –  $5.75
Select $212.27 –  $0.44
Ch-Se Spread $19.50 –  $5.31

 

Futures

Feeder Cattle  Aug. 30 Change
Sep $132.400 –  $0.850
Oct $130.800 –  $1.725
Nov $130.325 –  $1.975
Jan ’20 $128.500 –  $1.925
Mar $128.050 –  $2.175
Apr $128.925 –  $2.400
May $129.575 –  $2.325
Aug $131.150 n/a

 

Live Cattle   Aug. 30 Change
Aug $105.000 + $0.375
Oct $98.925 – $0.475
Dec $103.675 – $0.625
Feb ’20 $109.025 – $0.700
Apr $111.175 – $0.725
Jun $104.400 – $0.400
Aug $102.475 – $0.525
Oct $104.675 – $0.575
Dec $108.400 + $0.450

 

Corn futures Aug. 30 Change
Sep $3.580 – $0.016
Dec $3.696 + $0.020
Mar ’20 $3.822 + $0.022
May $3.900 + $0.016
Jul $3.970 + $0.018
Sep $3.992 + $0.002

 

Oil CME-WTI Aug. 30 Change
Oct $55.10 + $0.93
Nov $54.89 + $0.87
Dec $54.56 + $0.82
Jan ’20 $54.16 + $0.75
Feb $53.78 + $0.69
Mar $53.43 + $0.61

 

Equities

Equity Indexes Aug. 30 Change
Dow Industrial Average  26403.28 + 774.38
NASDAQ     7962.88 + 211.11
S&P 500     2926.46 +   79.35
Dollar (DXY)          98.81 +     1.55
Cattle Current Weekly Highlights—Week ending Aug. 30, 2019 2019-08-31T16:08:48-05:00

Cattle Current Weekly Highlights—Week ending Aug. 23, 2019

Calf and feeder cattle prices last week continued to rebound from bearishness tied to the Tyson fire.

Nationwide, steers and heifers sold $1-$5/cwt. higher, according to the Agricultural Marketing Service (AMS).

“The supply of feeders was light with receipts much lower than normal,” according to AMS analysts. “Coupling the week’s receipts with last week, a new two-week non-holiday low was set by only having 192,900 head sold at weekly auctions.”

After getting within spitting distance of where they were before the fire, Cattle futures fell on Friday, beneath the weight of a variety of factors that included record-high July U.S. red meat production, the sharp month-to-month increase in frozen beef supplies an sharply lower outside markets tied to increasingly volatile trade relations between the U.S. and China.

Feeder Cattle futures closed $2.77 and 87¢ higher in the front two contracts week to week on Friday and then an average of 31¢ lower.

“The finished cattle market experienced a soft rebound this week following last week’s precipitous decline,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A few dollars were gained back by cattle feeders, but they are still below where they were prior to the news of the Tyson fire. The story in all of this is what is happening in futures. The August Live Cattle contract has regained half of its losses but all the deferred contracts continue to be bottom feeders. The deferred contracts have failed to have any follow-through when compared to the August contract. When the August contract terminates, the October contract is likely to make some type of sudden movement since it will be the nearby contract. The strong basis will keep cattle moving out of feedlots.”

Week to week on Friday, Live Cattle futures closed an average of $1.54 higher through the front five contracts (60¢ higher to $4.70 higher in spot Aug) and then an average of 36¢ lower.

Choice boxed beef cutout value was $1.17 lower week to week on Friday afternoon at $237.52/cwt. Select was 55¢ lowerat $212.71.

“Beef markets reacted sharply higher last week as fears of reduced product availability initially led to the sharp rise in prices for Choice boxed beef, up 12% from the Aug. 9 close to the peak Aug. 21,” AMS analysts explain. “Much of this rise was attributed to buying for the coming Labor Day holiday (September 2) as retailers competed to acquire sufficient product to cover planned holiday promotions. Prices have since begun to decline as buyers cover their needs and retreat from the market.”

“…there was concern that the reduced slaughter capacity may influence the short and intermediate term availability of beef items. Using weekly slaughter data, it is too early to tell if slaughter has actually slowed due to the Tyson facility being shut down,” Griffith says. “However, it appears that other facilities have ramped up chain speed and are running on Saturday to fill the gap. One should not be so naïve to think that packers are running faster and harder to help the cattle industry. Packers are attempting to pick up the slack because they are making profits that exceed $400 per head. Thus, there is plenty of incentive for packers to run chain speeds as quickly as possible and keep killing cattle. Paying workers overtime wages is a small price to pay to take advantage of the current beef market. Maybe the one positive for cattle producers to take away from this is that beef demand is strong.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 23

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

87,400

(-17,400)

64,900

(+37,000)

65,900

(-4,200)

218,200

(+15,400)

 

CME Feeder Index

CME Feeder Index* Aug. 22 Change
  $139.72 + 2.12

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 23 Change
600-700 lbs. $160.37 + $1.44
700-800 lbs. $152.10 + $3.54
800-900 lbs. $145.66 + $2.20

 

South Central

Steers-Cash Aug. 23 Change
500-600 lbs. $149.29 + $1.08
600-700 lbs. $144.66 + $2.20
700-800 lbs. $140.09 + $3.89

 

Southeast

Steers-Cash Aug. 23 Change
400-500 lbs. $144.73 + $3.13
500-600 lbs. $136.27 + $2.49
600-700 lbs. $131.96 + $3.18

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 23 ($/cwt) Change
Choice $237.52 –  $1.17
Select $212.71 –  $0.55
Ch-Se Spread $24.81 –  $0.62

 

Futures

Feeder Cattle  Aug. 23 Change
Aug $137.350 + $2.775
Sep $133.250 + $0.875
Oct $132.525 –  $0.325
Nov $132.300 –  $0.450
Jan ’20 $130.425 –  $0.500
Mar $130.225 –  $0.075
Apr $131.325 –  $0.100
May $131.900 –  $0.400

 

Live Cattle   Aug. 23 Change
Aug $104.625 +$4.700
Oct $99.400 +$1.350
Dec $104.300 +$0.775
Feb ’20 $109.725 +$0.800
Apr $111.900 +$0.600
Jun $104.800 – $0.025
Aug $103.000 – $0.200
Oct $105.250 – $0.325
Dec $107.950 – $0.900

 

Corn futures Aug. 23 Change
Sep $3.596 –  $0.114
Dec $3.676 –  $0.130
Mar ’20 $3.800 –  $0.126
May $3.884 –  $0.116
Jul $3.952 –  $0.104
Sep $3.990 –  $0.060

 

Oil CME-WTI Aug. 23 Change
Oct $54.17 –  $0.64
Nov $54.02 –  $0.40
Dec $53.74 –  $0.25
Jan ’20 $53.41 –  $0.15
Feb $53.09 –  $0.10
Mar $52.82 –  $0.08

 

Equities

Equity Indexes Aug. 23 Change
Dow Industrial Average  25628.90 -257.11
NASDAQ     7751.77 -144.22
S&P 500     2847.11 –   41.57
Dollar (DXY)          97.26 –    0.94
Cattle Current Weekly Highlights—Week ending Aug. 23, 2019 2019-08-26T12:40:57-05:00

Cattle Current Weekly Highlights—Week ending Aug. 16, 2019

Fire at the Tyson beef packing plant at Holcombe, KS cast a pall over cattle markets last week.

Uncertainty about how much beef packing capacity was lost and for how long, amid seasonally and cyclically heavy fed cattle supplies, created an exodus among futures traders at the opening bell.

Live Cattle and Feeder Cattle futures were limit-down last Monday, then down the expanded limit in some contracts Tuesday.

Some auctions cancelled sales, waiting for the dust to settle. Where auctions proceeded, extreme heat and the futures fallout limited receipts and demand.

Nationwide, steers and heifers sold $5-$10/cwt. lower, according to the Agricultural Marketing Service (AMS). 

Feeder Cattle futures closed an average of $5.48 lower week to week on Friday. They were down an average $10.10 after the first two sessions of the week, before recovering an average of $5.18 on Wednesday.

The CME Feeder Cattle Index was down $4.06 week to week on Thursday at $137.60.

All of that was with Corn futures closing an average of 36¢ lower through the front five contracts week to week on Friday. Pressure was tied to the surprisingly large estimate for corn production in last week’s USDA Crop Production report.

Cash feeder prices were already under pressure, of course.

“Prices for feeder steers weighing 750-800 lbs. for the week of August 12, 2019, were $137.71/cwt., more than $10 below the same week last year,” say analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “Based on recent price data, the third-quarter 2019 feeder steer price was lowered by $1 to $142 and the 2019 fourth-quarter price forecast was lowered $1 from the prior month to $140. This month’s annual price forecast for 2019 is $141/cwt.”

“This market is likely to rebound following the kneejerk reaction,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The primary rebound will be in the yearling cattle arena which is where cattle feeders will continue to search for cattle to fill pen space. The calf market may see a short-lived rebound, but the calf market is going to be coming under seasonal price pressure as spring born calves begin to move to market in September and October.”

Fed Cattle Lower in Cautious Trade

Through late Friday afternoon, the only established negotiated cash fed cattle trade for the week remained the $105/cwt. paid in the Southern Plains, which was $5 less than the previous week. Although too few to trend, there were a few trades in Nebraska Friday at $106/cwt. on a live basis and at $172 in the beef.

Through Thursday the 5-area direct steer price was $105.40 on a live basis (7,941 head) and $170.46 in the beef (4,172 head). Week to week that was $8.71 less on a live basis and $12.11 less dressed.

Live Cattle futures were down an average of $7.34 after the first two trading sessions of the week. Week to week on Friday, Live Cattle futures closed an average of $6.53 lower ($4.17 to $8.70 lower). 

“The last time the weekly weighted average finished cattle price fell below $100 was December 2010, while the $100 mark was only achieved in 12 weeks from 2000 through 2010,” Griffith says. “Could the cash market fall below the century mark? It is possible, but unlikely.”

Wholesale beef prices exploded higher as there were apparently lots of buyers living hand to mouth in the spot market for supply.

Choice boxed beef cutout value was a staggering $22.32 higher week to week on Friday afternoon at $238.69/cwt. Select was $19.45 higher at $213.26.

“Price jumps like this do not come along very often and will be only temporary as adjustments take place in future,” say AMS analysts.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 16

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

104,800

(-49,800)

27,900

(-26,200)

70,100

(-171,300)

202,800

(-247,300)

 

CME Feeder Index

CME Feeder Index* Aug. 15 Change
  $137.60 –  4.06

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 16 Change
600-700 lbs. $158.93 –  $3.75
700-800 lbs. $148.56 –  $5.17
800-900 lbs. $143.46 –  $0.41

 

South Central

Steers-Cash Aug. 16 Change
500-600 lbs. $148.21 –  $9.02
600-700 lbs. $142.46 –  $8.36
700-800 lbs. $136.20 –  $7.61

 

Southeast

Steers-Cash Aug. 16 Change
400-500 lbs. $141.60 –  $7.08
500-600 lbs. $133.78 –  $7.93
600-700 lbs. $128.78 –  $6.65

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 16 ($/cwt) Change
Choice $238.69 + $22.32
Select $213.26 + $19.45
Ch-Se Spread $25.43 +   $2.87

 

Futures

Feeder Cattle  Aug. 16 Change
Aug $134.575 –  $4.325
Sep $132.375 –  $6.075
Oct $132.850 –  $5.400
Nov $132.750 –  $5.525
Jan ’20 $130.925 –  $5.675
Mar $130.300 –  $5.725
Apr $131.425 –  $5.675
May $132.300 –  $5.475

 

Live Cattle   Aug. 16 Change
Aug $99.925 – $8.125
Oct $98.050 – $8.700
Dec $103.525 – $7.925
Feb ’20 $108.925 – $6.775
Apr $111.300 – $6.375
Jun $104.825 – $6.050
Aug $103.200 – $5.750
Oct $105.575 – $4.900
Dec $108.850 – $4.175

 

Corn futures Aug. 16 Change
Sep $3.710 –  $0.392
Dec $3.806 –  $0.370
Mar ’20 $3.926 –  $0.356
May $4.000 –  $0.340
Jul $4.056 –  $0.318
Sep $4.050 –  $0.172

 

Oil CME-WTI Aug. 16 Change
Sep $54.87 + $0.37
Oct $54.81 + $0.44
Nov $54.42 + $0.33
Dec $53.99 + $0.21
Jan ’20 $53.56 + $0.10
Feb $53.19 + $0.03

 

Equities

Equity Indexes Aug. 16 Change
Dow Industrial Average  25886.01 -401.43
NASDAQ     7895.99 –  63.15
S&P 500     2888.68 –   29.97
Dollar (DXY)          98.20 +    0.71
Cattle Current Weekly Highlights—Week ending Aug. 16, 2019 2019-08-18T12:05:19-05:00

Cattle Current Weekly Highlights—Week ending Aug. 9, 2019

By and large, Cattle futures and cash markets faded the extreme volatility that whipsawed equity markets last week.

Feeder steer prices were uneven, according to the Agricultural Marketing Service (AMS): $2/cwt. lower in the South Central region; $3.50 higher in the North Central. Feeder heifers in both regions traded mostly steady to $1 lower. In the Southeast, feeder steers and heifers sold $1-$2 lower amid lighter offerings.

“Extremely hot weather gripped most of the southern trading areas…Temperatures topped 100 degrees (Fahrenheit) in the Southern Plains, with heat indices of +110 degrees all week,” say AMS analysts. “Pasture conditions are deteriorating, causing concern for the remainder of grazing season. Producers are weighing their options between decreased forage and the thought of hauling cattle to the auction barn in these extreme conditions.”

Feeder Cattle futures closed narrowly mixed week to week on Friday, from an average of 42¢ lower to an average of 27¢ higher.

“Most cattle producers in the business of marketing cattle recently have not been satisfied with current price levels. Many of them have found it difficult to make money at the cow-calf level. As well, stocker margins are extremely thin, if not negative in many instances,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.“The angst on this matter stems from summer Feeder Cattle futures market contracts trading as high as $160 in the March and April time period, now trading closer to $140. There was significant optimism in the spring for the summer marketing timeframe. It appeared that producers with fall-calving cows would benefit from backgrounding cattle through the summer, which was the same thought process of many stocker producers when purchasing calves in the spring. However, the market plummeted nearly $30/cwt. before recapturing $10. Maybe the one bright side is that the summer feeder cattle contracts have been trading in a tight range for about a month, which has provided another opportunity to reevaluate marketing alternatives.”

Griffith suggests the narrow trading channel for the past several weeks could stem partly from producers awaiting Monday’s USDA reports to get a tighter handle on potential corn and soybean production.

Corn futures closed an average of 8¢ higher through the front six contracts week to week on Friday, reversing the downward trend of recent weeks.

Cash Fed Cattle Prices Appeared Lower

“Negotiated cash trade followed a similar trend compared to recent weeks with early dressed purchases in the North ranging from $183 to $185/cwt. Dressed purchases late in the week traded mostly at $180,” say AMS analysts. “In the Western Corn Belt, early live purchases traded at $114-$115. Early live purchases in Nebraska were at $113.” They add that trade was slow to develop in the Southern Plains with producers passing on bids of $109.

Week to week on Friday, Live Cattle futures closed from an average of 50¢ lower in three contracts (10¢ to $1.07 lower) to an average of 31¢ higher.

As mentioned, that was despite extreme volatility rocking equity markets.

Major U.S. financial indices blasted lower Monday as China responded to the latest intended U.S. tariffs by allowing its currency to slide to decade-low values and ordering state-owned companies to suspend purchases of U.S. agricultural goods. Stocks were up the next day when China set its currency value higher than originally feared. Equities followed U.S.-China trade news up and down the rest of the week.

For perspective, the Dow Jones Industrial Average closed 767 points lower on Monday, 311 point higher Tuesday, little changed on Wednesday, though it was down 600 points during the session, up 371 points on Thursday, then 90 points lower Friday. For all of the gyrations, it ended up closing 197 points lower week to week on Friday.

Wholesale Values Increase

Wholesale beef values continued to gain traction last week, perhaps buoyed by the upcoming Labor Day weekend.

Choice boxed beef cutout value was $1.64 higher week to week on Friday afternoon at $216.37/cwt. Select was $3.18 higher at $193.81. For the last two weeks, Choice was up $4.20, while Select increased $5.47.

“The beef values that cattle producers ultimately see as determinants of cattle prices are the result of a diverse set of beef products with widely ranging values and seasonal patterns,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Many beef product values vary sharply at various times of the year as a result of seasonal demand and supply influences.”

Overall, Peel explains boxed beef cutout values typically vary by about 13% from a seasonal high in May (about 7% above average) to a seasonal low in October (about 6% below average).

Overall, U.S. beef exports continue to provide strong underpinning, despite all of the trade issues.

U.S. beef exports in June were up 3% year-over-year for volume (118,677 mt) and were 1% higher for value at $724.8 million, according to data released by USDA and compiled by the U.S. Meat Export Federation. Value was the fourth most on record for any month.

For January-June, beef exports were 2% less in volume (648,765 mt), compared to the same period last year, but value was steady with last year’s record value pace at $4.03 billion.

Beef export value per head of fed slaughter in June averaged $325.10, up 4% from a year ago, while export value for the first six months of the year averaged $312.06 per head, down 2%.

 

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 9

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

154,600

(+5,900)

54,100

(-40,100)

241,400

(+235,200)

450,100

(+201,000)

 

CME Feeder Index

CME Feeder Index* Aug. 9 Change
  $141.66 –  0.08

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 9 Change
600-700 lbs. $162.68 –  $2.79
700-800 lbs. $153.73 –  $0.62
800-900 lbs. $143.87 –  $4.86

 

South Central

Steers-Cash Aug. 9 Change
500-600 lbs. $157.23 + $0.72
600-700 lbs. $150.82 + $0.64
700-800 lbs. $143.81 + $2.00

 

Southeast

Steers-Cash Aug. 9 Change
400-500 lbs. $148.68 + $0.40
500-600 lbs. $141.71 –  $1.29
600-700 lbs. $135.43 –  $1.63

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 9 ($/cwt) Change
Choice $216.37 +  $1.64
Select $193.81 +  $3.18
Ch-Se Spread $22.56 –   $1.54

 

Futures

Feeder Cattle  Aug. 9 Change
Aug $138.900 –  $0.725
Sep $138.450 + $0.225
Oct $138.250 + $0.275
Nov $138.275 –  $0.150
Jan ’20 $136.600 –  $0.475
Mar $136.025 –  $0.375
Apr $137.100 –  $0.375
May $137.775 + $0.300

 

Live Cattle   Aug. 9 Change
Aug $108.050 +$0.400
Oct $106.750 – $1.075
Dec $111.450 – $0.325
Feb ’20 $115.700 +$0.250
Apr $117.675 +$0.500
Jun $110.875 +$0.375
Aug $108.950 +$0.125
Oct $110.475 +$0.225
Dec $113.025 – $0.100

 

Corn futures Aug. 9 Change
Sep $4.102 +$0.108
Dec $4.176 +$0.082
Mar ’20 $4.282 +$0.078
May $4.340 +$0.076
Jul $4.374 +$0.068
Sep $4.222 +$0.056

 

Oil CME-WTI Aug. 9 Change
Sep $54.50 – $1.16
Oct $54.37 – $1.30
Nov $54.09 – $1.57
Dec $53.78 – $1.78
Jan ’20 $53.46 – $1.95
Feb $53.16 – $2.06

 

Equities

Equity Indexes Aug. 9 Change
Dow Industrial Average  26287.44 -195.57
NASDAQ     7959.14 –  44.93
S&P 500     2918.65 –   13.40
Dollar (DXY)          97.03 –     1.07
Cattle Current Weekly Highlights—Week ending Aug. 9, 2019 2019-08-10T16:44:11-05:00

Cattle Current Weekly Highlights—Week ending Aug. 2, 2019

Growing pessimism about the U.S. and China being able to resolve trade differences sooner rather than later cast an increasingly dark cloud over commodities last week.

Nationwide, steers and heifers sold mostly steady to $2/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Some offerings in the Northern Plains were $2-$5 lower after the previous week’s sharp uptick, while some steers in the Southern Plains were $6-$7 higher at special sales,” explain AMS analysts. 

Most all of that came before the announcement Thursday that the U.S. plans to assess new tariffs on an additional $300 billion worth of Chinese imports, beginning Sept. 1.

Cattle futures, especially Feeder Cattle melted.

Feeder Cattle futures closed an average of $2.61 lower on Friday. They were an average of $4.41 lower week to week ($3.02 lower at the back to $5.87 lower toward the front).

That was despite Corn futures closing an average of 13¢ lower through the front five contracts week to week on Friday. That’s 45¢ lower for those contracts in the last three weeks.

That was also despite what appears to be ongoing strength in beef demand.

Wholesale beef values gained during the week, mostly due to strength in rib prices, according to AMS. 

Choice boxed beef cutout value was $2.56 higher week to week on Friday afternoon at $214.73/cwt. Select was $2.29 higher at $190.63.

Lighter year-over-year carcass weights continue to temper beef production amid increased cattle harvest.

The average dressed steer weight for the week ending July 20 was 866 lbs., which was 6 lbs. lighter than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 10 lbs. lighter at 795 lbs. Fed slaughter for the week was 20,754 head more than a year earlier. Total cattle slaughter was 20,474 head more. Beef production for the week of 527.3 million lbs. was 14.1 million lbs. more.

Lighter carcass weights also speak to currentness in feedlot marketing, which is helping support fed cattle prices.

Through late Friday afternoon, negotiated cash fed cattle trade was $1 lower in the Southern Plains at $111/cwt. Dressed sales in Nebraska were $2 higher than the bulk of the previous week’s trade at mostly $185. In the western Corn Belt, prices were steady: $115-$116 on a live basis and at mostly $185 in the beef.

However, Live Cattle futures closed an average of $2.25 lower week to week on Friday, with pressure from Lean Hog futures battered by the lack of a trade resolution between the U.S. and China.

“If feedstuff costs do not skyrocket, cattle feeders are expected to generally breakeven or post small profits late this year,” say analysts with the Livestock Marketing Information Center (LMIC). “In the situation where corn cost is already locked-in, November breakeven sales price is in the range of $105.50-106.50/cwt., and $111-112 for December.” That’s basis the Southern Plains, from non-survey estimation.

Despite ongoing pressure from the U.S.-China trade impasse, U.S. beef producers did receive some positive trade news to end the week.

The Unites States reach a new agreement with the EU on Friday that establishes a duty-free tariff rate quota (TRQ) exclusively for the United States. Under the agreement, American ranchers will have an initial TRQ of 18,500 metric tons annually, valued at approximately $220 million, according to the United States Trade Representative (USTR). Over seven years, the TRQ will grow to 35,000 metric tons annually, valued at approximately $420 million.

Under the current agreement, U.S. duty-free beef exports to the EU are only approximately 13,000 metric tons annually, valued at approximately $150 million, and risked declines going forward. The new agreement will go into effect following the European Parliament’s approval, which is expected this fall.

“We have to remember that only 4% of the world’s consumers live in this country,” says Randy Blach, CattleFax CEO. “Currently 14% of beef and beef by products are exported. More than 20% of the value of every fed steer is generated by exports. We need to have more outlets for not only our beef, but our poultry and pork.”

Through January of this year, U.S. beef exports equated to an average of $309.33 per head of fed slaughter, according to data released by USDA and compiled by the U.S. Meat Export Federation.

Blach was sharing insights at the Cattle Industry Summer Business Meeting near Denver on Tuesday. With record meat consumption expected next year, he emphasized the importance of opening export markets and resolving trade issues.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 2

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

148,700

(+17,500)

94,200

(+31,700)

6,200

(-107,600)

249,100

(-58,400)

 

CME Feeder Index

CME Feeder Index* Aug. 1 Change
  $141.74 + 2.16

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 2 Change
600-700 lbs. $162.58 –  $2.89
700-800 lbs. $153.73 –  $0.62
800-900 lbs. $143.87 –  $4.86

 

South Central

Steers-Cash Aug. 2 Change
500-600 lbs. $157.23 + $0.72
600-700 lbs. $150.82 + $0.64
700-800 lbs. $143.81 + $2.00

 

Southeast

Steers-Cash Aug. 2 Change
400-500 lbs. $148.68 + $0.60
500-600 lbs. $141.71 –  $1.29
600-700 lbs. $135.43 –  $1.63

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 2 ($/cwt) Change
Choice $214.73 +  $2.56
Select $190.63 +  $2.29
Ch-Se Spread $24.10 +  $0.27

 

Futures

Feeder Cattle  Aug. 2 Change
Aug $139.625 –  $4.100
Sep $138.225 –  $5.875
Oct $137.975 –  $5.600
Nov $138.425 –  $4.875
Jan ’20 $137.075 –  $4.525
Mar $136.400 –  $3.975
Apr $137.475 –  $3.325
May $137.475 –  $3.025

 

Live Cattle   Aug. 2 Change
Aug $107.650 – $1.000
Oct $107.825 – $2.075
Dec $111.775 – $2.525
Feb ’20 $115.450 – $2.575
Apr $117.175 – $2.600
Jun $110.500 – $2.550
Aug $108.525 – $2.275
Oct $110.250 – $2.750
Dec $113.125 – $1.875

 

Corn futures Aug. 2 Change
Jul $3.994 – $0.150
Sep $4.094 – $0.150
Dec $4.204 – $0.140
Mar ’20 $4.264 – $0.122
May $4.306 – $0.116
Jul $4.166 – $0.044

 

Oil CME-WTI Aug. 2 Change
Sep $55.66 – $0.54
Oct $55.67 – $0.66
Nov $55.66 – $0.76
Dec $55.56 – $0.87
Jan ’20 $55.41 – $0.95
Feb $55.22 – $0.99

 

Equities

Equity Indexes Aug. 2 Change
Dow Industrial Average  26485.01 -707.44
NASDAQ     8004.07 -326.14
S&P 500     2932.05 –  93.81
Dollar (DXY)          98.10 +    0.19
Cattle Current Weekly Highlights—Week ending Aug. 2, 2019 2019-08-04T13:51:12-05:00

Cattle Current Weekly Highlights—Week ending July 26, 2019

Cash feeder cattle continued to make incremental gains last week, supported by stability in the futures market and what looked to be steady to higher fed cattle prices. The previous week’s neutral Cattle on Feed report and the Cattle inventory report—hinting at an end to cyclically growing cattle numbers—also helped.

Overall, steers and heifers sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS), with some auctions in the Northern Plains reporting prices $4-$8 higher.

Feeder Cattle futures closed an average of $3.06 higher week to week on Friday ($2.12 higher at the back to $4.30 higher toward the front).

“It is always difficult to project what the market is going to do, but the best guess on yearling cattle is for the market to remain steady or gain a few dollars over the next four to five weeks,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The one thing that could stop a feeder cattle price rally in the next couple of weeks is a bullish crop report that sends corn prices closer to $5.” The next USDA reports with estimated crop production for this year are due out Aug. 12.

Corn futures closed an average of 11¢ lower through the front five contracts week to week on Friday. That’s 32¢ lower for those contracts in the last two weeks.

“Weaned and vaccinated cattle will continue to be in strong demand moving through the fall marketing time period as winter stocker programs look for inventory to put on pasture. The strong demand for those cattle today is associated with favorable forage conditions, good moisture, and the desire to receive lower risk cattle…” Griffith says.

AMS analysts point out, the U.S. Drought Monitor last week indicated drought across about 11% of the nation; about 3% in Moderate drought. “This is in a drastic contrast to a year ago, when near 54% of the country showed in drought status and 32% in Moderate drought or worse,” they say.

For the week ending July 21, 66% of the nation’s pasture and range was rated in Good (53%) or Excellent (13%) condition, compared to 45% last year. 9% was rated as Poor (7%) or Very Poor (2%), compared to 26% a year earlier.

Fed Cattle Prices Looked Steady to Higher

Negotiated cash fed cattle traded at $112/cwt. in the Texas Panhandle on Friday, according to the Texas Cattle Feeders Association. That was $1 more than a week earlier.

Elsewhere, prices were yet to be established through late Friday afternoon, according to reports from the Agricultural Marketing Service. Although too few to trend, there were some early live sales reported in the Western Corn Belt at $115-$116 and a few in the beef at $185. Those prices are at the top of the range for the region the prior week.

Live Cattle futures an average of $1.01 higher week to week on Friday.

Feedlot marketing remains current, based on the most recent USDA slaughter and carcass grading data.

The average dressed steer weight for the week ending July 13 was 865 lbs., which was 4 lbs. more than the previous week but 2 lbs. lighter year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 791 lbs. was 1 lb. lighter than the previous week and 8 lbs. less  year over year. Fed cattle slaughter of 531,743 head for the week was 11,828 head more than the same week a year earlier. Total cattle slaughter of 658,432 was 8,134 head more.

Moreover, Griffith says recent declines in frozen beef inventories point to strong demand.

“The quantity of beef in cold storage at the end of June totaled 394.5 million lbs., which only represents 78% of the average weekly beef production in 2019,” Griffith explains. “Thus, less than a week’s worth of beef production is in a freezer, which is an indicator that beef is moving at a decent pace. The June value is the lowest quantity of beef in cold storage since October 2014, which corresponds to a time period when fewer animals were being harvested due to rapid expansion in the beef cattle herd.”

Although seasonally softer, wholesale beef values continue higher than last year.

Choice boxed beef cutout value was $1.25 lower week to week on Friday afternoon at $212.17/cwt. Select was $1.17 lower at $188.34.

“Boxed beef values have pretty much held their ground during the dog days of summer as excellent beef demand, continued large kill levels and good margins remain for packers,” say AMS analysts. 

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 26

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

131,200

(-18,200)

62,500

(+3,300)

113,800

(-103,400)

307,500

(-118,300)

 

CME Feeder Index

CME Feeder Index* July 25 Change
  $139.58 + 0.93

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 26 Change
600-700 lbs. $165.47 + $4.58
700-800 lbs. $154.35 + $3.45
800-900 lbs. $148.73 + $4.57

 

South Central

Steers-Cash July 26 Change
500-600 lbs. $156.51 + $1.44
600-700 lbs. $150.18 + $2.07
700-800 lbs. $141.81 + $0.60

 

Southeast

Steers-Cash July 26 Change
400-500 lbs. $148.28 + $0.50
500-600 lbs. $143.00 + $1.37
600-700 lbs. $137.06 + $4.73

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 26 ($/cwt) Change
Choice $212.17 –   $1.25
Select $188.34 –   $1.17 
Ch-Se Spread $23.83 –   $0.08

 

Futures

Feeder Cattle  July 26 Change
Aug $143.725 + $3.750
Sep $144.100 + $4.300
Oct $143.575 + $3.550
Nov $143.300 + $3.075
Jan ’20 $141.600 + $2.700
Mar $140.375 + $2.475
Apr $140.800 + $2.550
May $140.500 + $2.125

 

Live Cattle   July 26 Change
Aug $108.650 +$1.050
Oct $109.900 +$1.400
Dec $114.300 +$1.125
Feb ’20 $118.025 +$1.000
Apr $119.775 +$1.000
Jun $113.050 +$0.950
Aug $111.100 +$0.650
Oct $113.000 +$0.700
Dec $115.000 +$1.200

 

Corn futures July 26 Change
Jul $4.144 – $0.162
Sep $4.244 – $0.112
Dec $4.344 – $0.096
Mar ’20 $4.386 – $0.094
May $4.422 – $0.090
Jul $4.210 – $0.044

 

Oil CME-WTI July 26 Change
Sep $56.20 +$0.44
Oct $56.33 +$0.51
Nov $56.42 +$0.56
Dec $56.43 +$0.60
Jan ’20 $56.36 +$0.64
Feb $56.21 +$0.65

 

Equities

Equity Indexes July 26 Change
Dow Industrial Average  27192.45 +  38.25
NASDAQ     8330.21 +183.72
S&P 500     3025.86 +  49.25
Dollar (DXY)          97.91 +    0.84
Cattle Current Weekly Highlights—Week ending July 26, 2019 2019-07-27T16:49:23-05:00

Cattle Current Weekly Highlights—Week ending July 19, 2019

Softer futures prices and volatility in grain markets helped cap recent strength in cash feeder cattle prices. Nationwide, steers and heifers sold $3/cwt. lower to $3 higher, according to USDA’s Agricultural Marketing Service (AMS).

“The pull on yearling cattle is dominated by feedlots that are attempting to fill pen space. Similarly, stocker operators who are taking advantage of the seasonally strong summer feeder cattle market are purchasing calves to replace the yearling cattle that are being moved to the feedlot,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Receipts were somewhat curtailed as summer returned to the heart of the country. Dangerous heat indexes spread from the Southwest to the Northeast and everywhere in between mid to late week,” say AMS analysts. “Some rains moved through the Northern Plains with some ranchers in South Dakota still trying to get their first cutting of hay done. Farmers and ranchers have been very focused on moisture needed after last year’s momentous drought that encompassed a vast area of grazing acres. Even though this spring has been extremely wet in places, some areas do need a drink now as heat indexes rise into triple digits.” 

Feeder Cattle futures closed an average of $2.26 lower week to week on Friday. That was with Corn futures closing an average of 21¢ lower through the front five contracts week to week.

“With the strength in the yearling market the past couple of weeks, the question on many producers’ minds is how long will these prices hold and if there is a chance they can go higher,” Griffith says. “Starting with history, yearling cattle prices generally display strength from July through the middle of September. The July market started well, but there are some reasons to be concerned that feeder cattle prices will come under pressure sooner rather than later. The expectation of higher corn prices this fall and winter will temper interest in bidding up feeder cattle. Similarly, the sluggish live cattle futures price will weigh on feeder cattle prices moving through the second half of summer and into the fall marketing time period.

“With that being said, it is difficult to imagine yearling cattle prices finding much of a way to climb higher in 2019. At the same time, it may be wise to market yearling cattle sooner rather than later.”

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

Live Cattle futures an average of $1.14 lower week to week on Friday.

Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.

Choice boxed beef cutout value was 62¢ higher week to week on Friday afternoon at $213.42/cwt. Select was 9¢ lower at $189.51.

“The $20/cwt. decline since the end of April is not at all surprising when considering last year’s summer low was $28 lower than the spring price peak; the five-year average decline is $30,” Griffith says. “Despite the summer price pressure, the only beef primal exhibiting lower prices compared to last year is the loin. The rib primal struggled through most of May and June, but held its own to start July. The chuck could be considered the primal displaying the most strength as prices are above year-ago levels and trading steady with the winter months. However, the brisket has been king for most of the year as the smoking of briskets has become a craze in more parts of the U.S. than just Texas. Another beef item price to make note of is fresh 50% lean beef. Fresh 50% lean beef comes from the trimmings of finished cattle, and the price of this product has been over $80 since March.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 19

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

149,400

(+13,700)

59,200

(-18,500)

217,200

(+5,400)

425,800

(+90,300)

 

CME Feeder Index

CME Feeder Index* July 18 Change
  $138.67 –  2.39

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 19 Change
600-700 lbs. $160.89 –  $4.06
700-800 lbs. $151.00 –  $4.06
800-900 lbs. $144.16 –  $4.06

 

South Central

Steers-Cash July 19 Change
500-600 lbs. $155.07 + $0.66
600-700 lbs. $148.11 + $0.29
700-800 lbs. $141.21 –  $0.89

 

Southeast

Steers-Cash July 19 Change
400-500 lbs. $147.78 + $0.10
500-600 lbs. $141.63 + $0.58
600-700 lbs. $132.33 –  $2.43

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 19 ($/cwt) Change
Choice $213.42 +  $0.62
Select $189.51 –   $0.09 
Ch-Se Spread $23.91 +  $0.71

 

Futures

Feeder Cattle  July 19 Change
Aug $139.375 –  $2.225
Sep $139.800 –  $2.750
Oct $140.025 –  $2.825
Nov $140.225 –  $2.400
Jan ’20 $138.900 –  $2.125
Mar $137.900 –  $1.975
Apr $138.250 –  $1.925
May $138.375 –  $1.875

 

Live Cattle   July 19 Change
Aug $107.600 – $0.875
Oct $108.500 – $1.475
Dec $113.175 – $1.050
Feb ’20 $117.025 – $1.125
Apr $118.775 – $1.350
Jun $112.100 – $1.200
Aug $110.450 – $1.100
Oct $112.300 – $1.075
Dec $113.800 – $1.050

 

Corn futures July 19 Change
Jul $4.306 – $0.236
Sep $4.356 – $0.236
Dec $4.440 – $0.210
Mar ’20 $4.480 – $0.186
May $4.512 – $0.164
Jul $4.254 – $0.060

 

Oil CME-WTI July 19 Change
Aug $55.63 – $4.58
Sep $55.76 – $4.54
Oct $55.82 – $4.45
Nov $55.86 – $4.29
Dec $55.83 – $4.13
Jan ’20 $55.72 – $3.98

 

Equities

Equity Indexes July 19 Change
Dow Industrial Average  27154.20 – 177.83
NASDAQ     8146.49 –   97.65
S&P 500     2976.61 –   37.16
Dollar (DXY)          97.07 +    0.35
Cattle Current Weekly Highlights—Week ending July 19, 2019 2019-07-20T17:00:10-05:00

Cattle Current Weekly Highlights—Week ending July 12, 2019

Finally, feeder cattle markets gained some seasonal steam last week.

Overall, steers and heifers traded steady to $5/cwt. higher early in the week and then $3-$10 higher, according to the Agricultural Marketing Service (AMS).

“Market activity at special sales throughout the country was strong, especially after Tuesday’s rally on the CME Feeder board. Traders quickly and aggressively

moved back into the market,” say AMS analysts.

On the other side of the trade, the AMS folks note, “Ranchers were ready

and willing to sell cattle out front with the market getting a little bounce.” Analysts are referring to heavy video trade last week, including 118,000 via the Western Video Market and 209,000 head at Superior’s week-long auction. 

Feeder Cattle futures closed an average of 3.11 higher week to week on Friday.

At $141.06 on Thursday, the CME Feeder Cattle Index was $7.85 higher week to week, at the highest level since the first two days of May.

“The surge in the index value is largely due to cattle feeders looking to reload pens that have emptied recently. It makes logical sense that cattle feeders were looking to capitalize on a somewhat soft feeder cattle market in May and June, but the strong demand for feeder cattle has boosted prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Fed Cattle Prices Appeared Higher

Negotiated cash fed cattle prices were yet to be fully established through Friday afternoon, based on reports from AMS, but the trend appeared decidedly higher. The Texas Cattle Feeders Association reported its members trading at $112/cwt., which was $3 more than the previous week. Although too few to trend, early dressed sales were $2-$5 higher at $182-$185 in Nebraska and the western Corn Belt.

“It appears the packer needs inventory and the fed cattle market is bracing

for a higher market,” explain AMS analysts. “Market-ready fed cattle supplies in the Northern Plains are very current, and for the time being, will remain that way. The Southern Plains will more than likely remain at a discount because of

large numbers of cattle on feed.”

After 77¢ higher in spot Aug, Live Cattle futures an average of $1.80 higher week to week on Friday.

Wholesale beef values continue the seasonal decline.

Choice boxed beef cutout value was $4.87 lower week to week on Friday afternoon at $212.80/cwt. Select was $5.20 lower at $189.60.

“Even though the cutout has turned lower, packer margins are reading on the positive side, despite having to increase bids to get cattle purchased,” according to AMS.

U.S. beef exports continue to underpin cattle prices but are getting iffier with protracted unresolved trade issues. Beef exports in May were steady with the previous year for volume (117,541 metric tons) and slightly higher for value at $727.6 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). However export volume for January-May is 3% less year over year, while value is slightly lower at $3.3 billion.

“Beef exports to Japan, the leading beef export market, were down by 4.9% year over year in May and are down 4.5% for the first five months of 2019,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef exports to Japan are beginning to show the impact of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), in which the U.S. does not participate, leaving the U.S. at a bigger tariff disadvantage.”

In fact, according to USMEF, all of U.S. pork and beef’s major competitors gained tariff relief in Japan this year through that agreement, as well as the economic partnership agreement between Japan and the European Union.

Corn Price Uncertainty Continues

Wonderments about how many acres of corn were planted and the ultimate yield, due to the long wet spring continue to roil markets.

Despite last week’s bearish World Agricultural Supply and Demand Estimates (WASDE) shaving a dime off the projected season average corn price to $3.70/bu., Corn futures closed an average of 15¢ higher through the front six contracts week to week on Friday. The WASDE was based on the acreage and yield projections from the June 28 USDA Acreage report. Traders are betting there will be significantly less corn.

In July, USDA’s National Agricultural Statistics Service (NASS) will collect updated information on 2019 acres planted, and if the newly collected data justify any changes, NASS will publish updated acreage estimates in the August Crop Production report.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 12

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

135,700

(+111,000)

77,700

(+50,500)

121,100

(+81,900)

335,500

(+244,400)

 

CME Feeder Index

CME Feeder Index* July 11 Change
  $141.06 + 7.85

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 12 Change
600-700 lbs. $165.82 +  $4.44
700-800 lbs. $156.78 +  $3.14
800-900 lbs. $147.03 +$10.36

 

South Central

Steers-Cash July 12 Change
500-600 lbs. $154.41 –   $4.06
600-700 lbs. $147.82 –   $0.24
700-800 lbs. $142.10 +  $2.61

 

Southeast

Steers-Cash July 12 Change
400-500 lbs. $147.68 +  $3.23
500-600 lbs. $141.05 +  $1.80
600-700 lbs. $134.76 +  $3.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 12 ($/cwt) Change
Choice $212.80 –   $4.87
Select $189.60 –   $5.20 
Ch-Se Spread $23.20 +  $0.33

 

Futures

Feeder Cattle  July 12 Change
Aug $141.600 + $2.775
Sep $142.550 + $3.850
Oct $142.850 + $3.950
Nov $142.625 + $3.400
Jan ’20 $141.025 + $3.075
Mar $139.875 + $3.000
Apr $140.175 + $2.600
May $140.250 + $2.200

 

Live Cattle   July 12 Change
Aug $108.475 + $0.775
Oct $109.975 + $1.900
Dec $114.225 + $1.900
Feb ’20 $118.150 + $1.925
Apr $120.125 + $1.825
Jun $113.300 + $1.825
Aug $111.550 + $1.725
Oct $113.375 + $1.550
Dec $114.850 + $1.750

 

Corn futures July 12 Change
Jul $4.494 + $0.154
Sep $4.542 + $0.156
Dec $4.592 + $0.170
Mar ’20 $4.650 + $0.160
May $4.666 + $0.142
Jul $4.676 + $0.120

 

Oil CME-WTI July 12 Change
Aug $60.21 + $2.70
Sep $60.30 + $2.71
Oct $60.27 + $2.71
Nov $60.15 + $2.67
Dec $59.96 + $2.61
Jan ’20 $59.70 + $2.53

 

Equities

Equity Indexes July 12 Change
Dow Industrial Average  27332.03 + 409.91
NASDAQ     8244.14 +   82.35
S&P 500     3013.77 +   23.36
Dollar (DXY)          96.72 –      0.45
Cattle Current Weekly Highlights—Week ending July 12, 2019 2019-07-14T15:20:50-05:00

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