Weekly Market Highlights

Cattle Current Weekly Highlights—Week ending Aug. 7, 2020

Calves and feeder cattle continued to trend higher last week, helped along by stronger cash fed cattle prices.

Nationwide, steers and heifers sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Every year, producers try to get long or short yearling cattle marketed before the Labor Day holiday and this year has been no exception,” say AMS analysts. “The first full week in August brought around 11% more cattle to the sale barns than a year ago.” 

Except for 15¢ higher in Nov, Feeder Cattle futures closed an average of 98¢ lower week to week on Friday (25¢ to $1.95 lower).

“Extremely unique market dynamics are driving the cattle market to price levels that may not have been imaginable just a few weeks ago,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The feeder cattle market is being driven by expectations for higher finished cattle prices. The February live cattle contract price increased $7 since July 1, which would be nearly a $100 per head increase in value for a 1,400 lb. animal. The increase in the live cattle contract has pushed the August feeder cattle contract $10 higher, which would be an $80 per head value increase.”

The CME Feeder Cattle Index was $3.34 higher week to week on Thursday at $141.92.

Griffith notes that cattle feeders must expect fed cattle prices to continue increasing, given the current buy-sell margin of locking in a price currently and how much more they’re willing to pay for feeder cattle.

At the same time, AMS analysts point out deepening drought in some parts of the country is beginning to force some management and marketing decisions.

For the week of Aug. 4, the U.S. Drought Monitor classified 54.01% of the continental United States from abnormally dry to extreme drought. That’s the fourth consecutive week that more than half of the nation was enduring designated dryness or drought conditions, according to AMS.

“One region of note would be in Wyoming and creeping into Northwest Nebraska. Some producers in those areas are contemplating early weaning of calves,” AMS analysts explain. 

The most recent USDA Crop Progress report pegged 30% of the nation’s pasture and range condition as Poor or Very Poor, which was 17% more than the same time last year.

Cash Fed Cattle Trade Higher

Negotiated cash fed cattle trade for the week was mainly $3 higher through Friday afternoon at $103/cwt. on a live basis and at $163 in the beef.

Through Thursday, the five-area direct weighted average steer price was $101.28 on a live basis, which was $2.79 higher than the previous week. The average dressed steer price was $163.19, which was $3.17 higher than the prior week. Compared to the same time last year, though, those prices were $12.83 less and $19.38 less, respectively.

According to AMS, slaughter cattle numbers remain tighter in the Northern Plains, while supplies continue to outpace packing capacity in the Southern Plains.

Griffith points out it has been a year since the Tyson packing plant fire in Kansas roiled markets.

“The market has essentially been in a funk for 52 weeks, due to the fire and coronavirus. The market appears to be trying to shake all the tough times over the last year, but there are more rivers to forge before anyone is comfortable,” Griffith says.

Except for 47¢ and 57¢ higher in Apr and away Dec, Live Cattle futures closed an average of 55¢ lower week to week on Friday (2¢ to $1.47 lower).

“Sideways action at the CME could be viewed as a friendly,” say AMS analysts. The largest single-day move this week on any of the six front Cattle contracts was $1.33 lower.” 

Wholesale Values Bump Higher

Wholesale beef prices continued to edge higher from the recent bottom.

Choice boxed beef cutout value was $2.21 higher week to week on Friday at $205.47/cwt. Select was $2.86 higher at $192.75.

Estimated cattle slaughter for the week ending Aug. 8 was 633,000 head, which would be 5,000 head fewer than the previous week and 14,000 head fewer than the same week last year.

Year to date, total cattle slaughter was 1.04 million less (-5.2%) than the same period last year at 19.05 million head.

Estimated beef production for the week was 527.2 million lbs., which was 3.1 million lbs. less than the previous week, but 5.6 million lbs. more than the prior year.

Year to date, estimated beef production of 15.74 billion lbs. is 405 million lbs. less (-2.5%) than last year.

“Beef supply conditions have stabilized, albeit at higher levels of production year over year in the second half of 2020. Beef demand will be critical in determining overall beef prices and, subsequently, cattle prices going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

The advance estimate for U.S. real GDP in the second quarter was a staggering -32.9%, according to the U.S. Bureau of Economic Analysis. The nation’s unemployment rate in July was 10.2%.

“In the short run, willingness to purchase beef will depend on the relative prices of other products, particularly substitute products that may be consumed in place of a particular product,” Peel says. “For specific beef products, this is a complicated consideration, including other proteins such as pork and poultry, as well as the multitude of other beef products that may be chosen by consumers. In periods of low income, beef consumers may trade down from high cost beef products to lower valued products. Food service demand, which remains diminished, will emphasize this impact going forward.”

Friday to Friday Change

 

Weekly Auction Receipts

 

Aug. 7 Auction Direct

Video/net

Total
 

171,800

(+35,700)

66,400

(+17,900)

261,400

(+261,000)

499,600

(+314,600)

 

 

CME Feeder Index

CME Feeder Index* Aug. 6 Change
  $141.92 +  $3.34

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 7 Change
600-700 lbs. $156.39 +  $2.81
700-800 lbs. $146.59 +  $1.36
800-900 lbs. $144.49 +  $3.63

 

South Central

Steers-Cash Aug. 7 Change
500-600 lbs. $158.38 + $4.16
600-700 lbs. $149.82 + $1.72
700-800 lbs. $142.57 + $2.37

 

Southeast

Steers-Cash Aug. 7 Change
400-500 lbs. $149.64 + $0.82
500-600 lbs. $40.90 + $1.00
600-700 lbs. $133.11 –  $1.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 7 ($/cwt) Change
Choice $205.47 + $2.21
Select $192.75 + $2.86
Ch-Se Spread $12.72 –  $0.65

 

Futures

Feeder Cattle  Aug. 7 Change
Aug $142.725 –  $1.950
Sep $145.125 –  $1.100
Oct $146.400 –  $0.250
Nov $146.975 + $0.150
Jan ’21 $144.200 –  $0.400
Mar $142.725 –  $0.625
Apr $143.350 –  $1.225
May $143.725 –  $1.325

 

Live Cattle   Aug. 7 Change
Aug $102.800 –  $0.025
Oct $106.450 –  $1.425
Dec $110.075 –  $1.475
Feb ’21 $113.800 –  $0.750
Apr $116.325 + $0.475
Jun $109.800 –  $0.150
Aug $108.125 –  $0.575
Oct $110.450 –  $0.125
Dec $114.200 + $0.575

 

Corn  Aug. 7 Change
Sep $3.076 – $0.084
Dec $3.206 – $0.064
Mar ’21 $3.326 – $0.056
May $3.412 – $0.048
Jly $3.476 – $0.046
Sep $3.526 – $0.028

 

Oil CME-WTI Aug. 7 Change
Sep $41.22 + $0.95
Oct $41.49 + $0.92
Nov $41.86 + $0.95
Dec $42.19 + $0.97
Jan ’21 $42.48 + $0.99
Feb $42.76 + $1.01

 

Equities

Equity Indexes Aug. 7 Change
Dow Industrial Average  27433.48 +1005.16
NASDAQ  10745.28 +  265.70
S&P 500   3271.12 +     80.16
Dollar (DXY)       93.46 –        0.07
Cattle Current Weekly Highlights—Week ending Aug. 7, 2020 2020-08-08T14:40:27-05:00

Cattle Current Weekly Highlights—Week ending July 31, 2020

Calf prices continued to move contra-seasonally last week, seeking post-COVID fundamental levels, while strong demand continued for yearlings, with more optimism for fed cattle values.

Nationwide, steers and heifers sold steady to $4/cwt. higher, with the most advance on yearlings weighing more than 800 lbs., according to the Agricultural marketing Service (AMS).

“Calf prices are holding their own, and this is most likely due to how low prices were in the spring. Thus, it is not that calf prices are strong. They are simply trying to find where they should be, given today’s market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This class of cattle will start to see some pressure towards the end of summer and moving into the fall months.”

As for feeder cattle, Griffith says there is plenty of market optimism, but suggests, “Producers should take advantage of the marketing opportunity being made available to them right now. If the cattle will make money with a sale today, then move them. If the cattle need a few more days of growing, then try to forward contract the cattle.”

Feeder Cattle futures closed an average of $3.34 higher week to week on Friday, supported by the outlook for favorable corn prices.

“With improving corn conditions at this time of year, yields will no doubt improve, keeping the corn market under pressure, regardless of demand,” say AMS analysts. “Big crops usually get bigger and yields will be no exception. This makes it hard to convince anyone, especially farmer-feeders, that we will have any corn production problems. Thoughts that the size of the corn crop will overshadow demand has many producers willing to walk a lot of corn to town.”

Corn crop progress is ahead of last year and the five-year average, with 72% rated in Good or Excellent condition, in the USDA Crop Progress report for the week ending July 26.

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

Griffith also notes demand continues to be contra-seasonally strong for packer cows and bulls. “This is likely due to the demand for lean grinding beef that has skyrocketed during the COVID-19 pandemic as consumers are pulling ground beef off meat counter shelves rapidly,” he says.

Fed Cattle Prices Edge Higher

Negotiated cash fed cattle prices ended the week generally $1-$2 higher on a live basis at $97/cwt. in the Southern Plains, $100 in Nebraska, $98 in Colorado and steady at $101-$102 in the western Corn Belt. Dressed prices were $2 higher at $160.

Through Thursday, the average five-area direct weighted steer prices was $98.49/cwt. on a live basis, which was $1.26 more than the previous week, but $15.48 less than the same time last year. The average dressed steer price of $160.02 was $1.92 higher than the previous week, but $24.49 less than the previous year.

There are still plenty of backlogged market-ready fed cattle to work through, but it appears progress is being made, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“The calculated estimates of cattle on feed over 120 days are still very large compared to last year, but the difference has decreased by some 160,000 head since May,” Peel says, referring to the latest monthly Cattle on Feed report. “It appears that the backlog is decreasing but a sizable number of cattle remain to be cleaned up before feedlots will be current.”

Estimated total cattle slaughter for the week ending Aug. 1 was 638,000 head, which was 8,000 fewer than the previous week, but 5,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 18.4 million head is 1.02 million head fewer (-5.26%) than last year.

Live Cattle futures closed an average of $1.81 higher week to week on Friday. Along with firming wholesale beef values, support included a more positive weekly export outlook. U.S. beef export net sales for the week of July 23 totaled 29,500 metric tons (mt)—a market year high—up 89% from the previous week and up 81% from the previous four-week average. That’s according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service.

AMS analysts note the weaker U.S. dollar is helping exports, with the dollar index at its lowest level in two years.

“At this point in the game, it would appear the summer low is in for finished cattle. That likely means a slow grind to higher prices, because the Labor Day holiday is the only grilling holiday remaining and December is several months down the road,” Griffith says. “It is tough to predict how strong this market will be, but there is a chance of reaching $115 in December.”

Wholesale Beef Values Firm

Choice boxed beef cutout value closed higher week to week for the second consecutive week, suggesting the ebb is established and the market will proceed along more fundamental lines.

Choice boxed beef cutout value was $1.49 higher week to week on Friday at $203.26/cwt. Select was 74¢ lower at $189.39.

“Hopefully, price levels should be attractive for retail interest and to consumers with some of the lowest beef prices seen for the month of July,” say AMS analysts. 

The average dressed steer weight the week ending July 18 of 899 lbs. was 3 lbs. less than the prior week but 33 lbs. more than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as a week earlier but 34 lbs. heavier than the prior year.

“Federally inspected beef production has been above year-ago levels since the second week of June, while federally inspected cattle slaughter is down nearly 70,000 head over the same timeframe, compared to last year,” Griffith explains. “The increase in beef production stems from heavier cattle that spent more days on feed than was anticipated. However, it is not only total beef production that is being influenced by more days on feed. The increased number of days on feed is likely the reason more cattle are grading Choice.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 31 Auction Direct

Video/net

Total
 

136,100

(+8,000)

48,500

(-31,000)

400

(-96,200)

185,000

(-119,200)

 

 

CME Feeder Index

CME Feeder Index* July 30 Change
  $138.58 –   $0.85

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 31 Change
600-700 lbs. $153.58 –   $9.14
700-800 lbs. $145.23 –   $3.79
800-900 lbs. $140.86 –   $0.55

 

South Central

Steers-Cash July 31 Change
500-600 lbs. $154.22 + $1.41
600-700 lbs. $148.10 + $3.00
700-800 lbs. $140.20 –  $0.28

 

Southeast

Steers-Cash July 31 Change
400-500 lbs. $148.82 + $1.98
500-600 lbs. $139.90 + $0.96
600-700 lbs. $134.26 + $2.18

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 31 ($/cwt) Change
Choice $203.26 + $1.49
Select $189.89 –  $0.74
Ch-Se Spread $13.37 + $2.23

 

Futures

Feeder Cattle  July 31 Change
Aug $144.675 + $2.625
Sep $146.225 + $3.475
Oct $145.650 + $3.850
Nov $146.825 + $4.150
Jan ’21 $144.600 + $3.575
Mar $143.350 + $3.175
Apr $144.575 + $3.250
May $145.050 + $2.625

 

Live Cattle   July 31 Change
Aug $102.825 + $1.500
Oct $107.875 + $2.775
Dec $111.550 + $2.225
Feb ’21 $114.550 + $2.100
Apr $115.850 + $1.875
Jun $109.950 + $1.500
Aug $108.700 + $1.400
Oct $110.575 + $1.050
Dec $113.625 + $1.875

 

Corn  July 31 Change
Sep $3.160 – $0.102
Dec $3.270 – $0.080
Mar ’21 $3.382 – $0.078
May $3.460 – $0.070
Jly $3.522 – $0.062
Sep $3.554 – $0.042

 

Oil CME-WTI July 31 Change
Sep $40.27 –  $1.02
Oct $40.57 –  $0.88
Nov $40.91 –  $0.73
Dec $41.22 –  $0.60
Jan ’21 $41.49 –  $0.51
Feb $41.75 –  $0.43

 

Equities

Equity Indexes July 31 Change
Dow Industrial Average  26428.32 –     41.57
NASDAQ  10745.28 +  382.10
S&P 500   3271.12 +     55.49
Dollar (DXY)       93.46 –        0.89
Cattle Current Weekly Highlights—Week ending July 31, 2020 2020-08-02T15:13:41-05:00

Cattle Current Weekly Highlights—Week ending July 24, 2020

Recently increased feedlot turnover and the availability of grass yearlings helped lift calf and feeder cattle prices last week. Nationwide, steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS).

Feeder Cattle futures closed an average of 93¢ lower week to week on Friday (32¢ lower at the back to $1.42 lower).

“The strength that has been evident in the futures market the past couple of weeks is beginning to become evident in the cash feeder cattle and calf markets,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf market price movement could be considered contra-seasonal because the calf market tends to soften during the heat of summer and moving into the fall. However, the coronavirus pandemic depressed the calf market through the spring months and the first part of summer. The calf market is now trying to realign based on fundamental supply and demand. It is going to be extremely difficult to predict where this market will go over the next several months, but there is a good possibility that fall prices will be better than the fall of 2019.”

As for feeder cattle, Griffith notes the seasonal tendency of increasing prices through the summer seems to be intact.

“The market is offering producers an opportunity to sell calves at higher prices, and there is more upside potential,” Griffith says. “However, the market is so fragile that any negative news within the beef industry, such as news of higher feed costs or something negatively associated with coronavirus, could turn the feeder cattle market on its head.”

Get through August and net feedlot returns grow significantly more positive, according to the most recent Historical and Projected Kansas Feedlot Net Returns (HPK) from Kansas State University.

Fed Cattle Prices Edge Higher

Through Thursday, the average five-area direct fed steer price was $97.23/cwt. on a live basis, which was 91¢ higher than the previous week, but $18.20 less than the same time last year.

Regionally, negotiated cash fed cattle trade for the week was generally $1-$2 higher on a live basis at $96/cwt. in the Southern Plains, $98 in the Northern Plains and $99-$100 in the western Corn Belt. Dressed trades were mostly $1 higher at $158.

Live Cattle futures closed an average of 95¢ lower week to week on Friday (12¢ lower at the back to $1.95 lower in spot Aug).

Total estimated cattle slaughter for the week ending July 25 of 646,000 head would be 4,000 head fewer than the prior week and 6,000 head fewer than the same week a year earlier, according to USDA’s Estimated Weekly Meat Production Under Federal Inspection report.  

Year to date, through June, fed cattle slaughter of 12.08 million was 772,600 head fewer (-6.01%) than the same time last year, according to the monthly USDA Livestock Slaughter report.

Boxed Beef Price Might be Established

“There is a very good chance boxed beef prices have hit their summer low,” Griffith says. “If they have hit their low, then there is a good chance they will be somewhat stagnant for a while before a slow grind higher leading up to holidays at the end of the year. How high boxed beef prices move through the end of the year may depend on how holidays are celebrated if coronavirus remains a concern.”

Choice boxed beef cutout value was $1.30 higher week to week on Friday at $201.77/cwt. Select was 32¢ higher at $190.63.

“The expectation of strong beef production through the end of the year will temper wholesale beef values to some degree, simply due to the quantity supplied to the market,” Griffith explains. “Despite this strong production, Choice boxes have the potential to move back to the $225 to $230/cwt. range as an apex before the end of the year.”

Year to date through June, beef production under federal inspection of 12.78 billion lbs. was 279.7 million lbs. less (-2.14%) than the same time last year, according to the Livestock Slaughter report.

Heavier carcass weights continue to close the gap between beef production and the number of cattle harvested.

Year to date through June, the average dressed steer weight of 897 lbs. is 33 lbs. heavier. The average dressed heifer weight of 829 lbs. is 25 lbs. heavier. Both are record high, according to AMS.

“Beef production will be higher year over year for the remainder of the year,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-week market comments. “This may combine with limited demand to keep wholesale beef prices under pressure going forward.

“Longer term, beef demand may be affected by the economic recession. Impacts have not been obvious thus far but unemployment is still high and some unemployment benefits will end this month. With COVID-19 far from controlled, considerable uncertainty remains regarding how school schedules, sporting activities and business travel could affect beef demand this fall.”

USDA Reports on Price Investigation

USDA released its investigation into cattle and beef price reactions to last summer’s fire at the Tyson plant in Holcombe, KS and to disruptions wrought by COVID-19.

The report—Boxed Beef & Fed Cattle Price Spread Investigation Report—details market conditions and prices before, during and after those events, although the pandemic continues.

Keep in mind this USDA investigation does not examine potential violations of the Packers and Stockyards Act. USDA continues to cooperate with the Department of Justice Antitrust Division in that agency’s current investigation.

Instead, the report provides the logic and details behind the price reactions of the two black swan events: higher wholesale beef prices and lower fed cattle prices spawned by disruption to packing capacity and by altered demand flow, in the case of the pandemic.

“Frankly speaking, the report released by USDA did not reveal anything that was not already known,” Griffith says. “It appeared to be less of an investigation and more of a simple analysis and report of the data. Something further could come of this report, but it is highly unlikely any type of investigation is going to result in findings of the packers doing something illegal. Packers were taking advantage of what the market was offering.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 24 Auction Direct

Video/net

Total
 

128,100

(-21,000)

79,500

(-16,000)

96,600

(-228,800)

304,200

(-266,400)

 

 

CME Feeder Index

CME Feeder Index* July 23 Change
  $139.43 +  $2.82

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 24 Change
600-700 lbs. $162.72 +  $11.41
700-800 lbs. $149.02 +  $6.24
800-900 lbs. $141.41 +  $3.90

 

South Central

Steers-Cash July 24 Change
500-600 lbs. $152.81 + $0.55
600-700 lbs. $145.10 –  $0.11
700-800 lbs. $140.48 + $1.35

 

Southeast

Steers-Cash July 24 Change
400-500 lbs. $146.84 + $2.03
500-600 lbs. $138.94 + $1.77
600-700 lbs. $132.08 + $2.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 24 ($/cwt) Change
Choice $201.77 + $1.30
Select $190.63 + $0.32
Ch-Se Spread $11.14 + $0.98

 

Futures

Feeder Cattle  July 247 Change
Aug $142.050 –  $0.650
Sep $142.750 –  $0.575
Oct $142.800 –  $0.800
Nov $142.675 –  $1.175
Jan ’21 $141.025 –  $1.375
Mar $140.175 –  $1.425
Apr $141.325 –  $1.125
May $142.425 –  $0.325

 

Live Cattle   July 24 Change
Aug $101.325 –  $1.950
Oct $105.100 –  $1.775
Dec $109.325 –  $1.375
Feb ’21 $112.450 –  $1.325
Apr $113.975 –  $1.000
Jun $108.450 –  $0.275
Aug $107.300 –  $0.475
Oct $109.525 –  $0.275
Dec $111.750 –  $0.125

 

Corn  July 24 Change
Sep $3.262 – $0.068
Dec $3.350 – $0.046
Mar ’21 $3.460 – $0.036
May $3.530 – $0.030
Jly $3.584 – $0.022
Sep $3.596 – $0.008

 

Oil CME-WTI July 24 Change
Sep $42.18 + $1.43
Oct $42.00 + $1.06
Nov $41.82 + $0.71
Dec $41.64 + $0.37
Jan ’21 $41.45 + $0.03
Feb $41.29 –  $0.29

 

Equities

Equity Indexes July 24 Change
Dow Industrial Average  26469.89 –  202.06
NASDAQ  10363.18 –  140.01
S&P 500   3215.63 –       9.10
Dollar (DXY)       94.35 –       1.66
Cattle Current Weekly Highlights—Week ending July 24, 2020 2020-07-27T16:29:35-05:00

Cattle Current Weekly Highlights—Week ending July 17, 2020

Renewed optimism continued in cattle markets last week, bolstered by strong week-to-week gains in Cattle futures prices. Traders are apparently looking beyond the current backlog of fed cattle.

Calves and feeder cattle sold mixed. Steers and heifers in the South Central region traded $3-$4/cwt. higher, according to the Agricultural Marketing Service (AMS). In the North Central and Southeast regions, though, they sold from $3 lower to $1 higher.

AMS analysts note, “There was a big increase in North Central prices last week, due to some annual specials that bring high-quality, reputation, one-iron brand strings of cattle to town.” 

Feeder Cattle futures closed an average of $4.44 higher week to week on Friday ($2.95 higher to $6.95 higher in spot Aug).

“The market for heavier feeder cattle is beginning to gain some steam, which is a typical seasonal pattern,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The August Feeder cattle contract traded to its highest level since March 4 and has gained more than $6 since the Independence Day holiday. The August Feeder Cattle contract is still $14 lower than its contract high set in early January, but it is also $26 higher than its contract low set in early April. It is probably not feasible for the market to move back above the $150 mark for the August contract, but it could still have some upside potential given its slow and steady ascent back to its current level.”

On the other hand, Griffith notes summer heat and seasonality are weighing on calf prices. “The prices will continue to be pushed lower in the fall as the run of spring born calves make their way to market,” he says.

In the latest monthly Livestock, Dairy and Poultry Outlook (LDPO), analysts with USDA’s Economic Research Service (ERS) say expected higher fed cattle slaughter and increased feedlot marketings should improve demand for feeder cattle heading into the third quarter.

ERS projects the average feeder steer price (basis Oklahoma City) at $133/cwt. in the third quarter and $131 in the fourth quarter for an annual average of $131.70. Prices are projected at $129 in the first quarter of next year and at $132 in the second.

Of course, dry conditions could have plenty to say about late-summer markets.

“For the first time this year, over 50% of the country is in some sort of drought designation,” say AMS analysts. “The last time that occurred was the week ending Sept. 18, 2018, when the country was coming off a historical drought.”

Specifically, 51.4% of the continental U.S. was designated from abnormally dry to Extreme Drought, according to the U.S. Drought Monitor for July 14. At the same time last year, it was 9.79%.

For the week ending July 12, 36% of the nation’s pasture and range was rated in Good or Excellent condition, which was 32% less than last year, according to USDA’s Crop Progress report. Conversely, 30% was rated in Poor or Very Poor condition, compared to 8% at the same time last year.

Fed Cattle Prices Firm

Negotiated cash fed cattle prices were mainly steady last week.

The weighted average five-area direct fed steer price through Thursday was $96.32/cwt. on a  live basis, which was 35¢higher than the previous week, but $16.70 less than the same week last year. The average steer price in the beef was $157.58, which was 9¢less than the previous week and $25.39 less than a year earlier.

Live Cattle futures closed an average of $1.89 higher week to week on Friday ($1.05 higher to $3.27 higher in spot Aug).

“The October Live Cattle futures contract gained $6 since the beginning of July, while the December Live Cattle contract gained about $5.50 over that same timeframe,” Griffith says. “These prices still do not put finished cattle where cattle feeders want them, but there is a lot of time between now and the fall marketing time period for cattle to keep creeping higher. Another point of optimism is the fact that current cash prices have found a steady state instead of continuing to decline. The steep decline through the spring did not bode well for summer market prices, but they are holding their ground well given seasonal pressure.”

However, ERS lowered forecast fed steer prices by $4 to $100/cwt. in the third quarter and by $3 in the fourth quarter to $103.

“Despite slaughter rates having stabilized near year-ago levels, there continues to be a large volume of market-ready cattle supplies available for slaughter,” say ERS analysts, in the LDPO. “Based on the USDA Cattle on Feed report for June, the number of cattle that have been on feed over 150 days grew to 971,000 head, or 42% more than last year. Further, wholesale beef prices declined rapidly from recent peaks to below year-ago levels, marking a sharp turnaround.”

Retail Beef Prices Still Elevated

Choice boxed beef values last week sank to the lowest levels since December of 2017, according to AMS.

Choice boxed beef cutout value was $4.03 lower week to week on Friday at $200.47/cwt. Select was $3.98 lower at $190.31.

Renewed packing capacity and cattle slaughter is behind normalizing wholesale values, while heavier carcasses are adding extra pressure.

ERS increased forecast beef production for this year by 260 million pounds, compared to the prior month, to 26.9 billion lbs., just about 1% less than last year.

At the same time, retail beef prices remain high, relative to current production, following the price surge in the wake of coronavirus disruptions.

Retail Choice beef value in June was nearly $7.56/lb.. That was a tick lower than in May but $1.05 higher than in January, according to Griffith. The all fresh retail beef price was around $7.38/lb., up 34¢ from May and $1.46 more compared to January.

“Retailers were forced to push prices higher rather rapidly in April and May due to reduced supply of beef from lower cattle slaughter,” Griffith explains. “Though prices escalated quickly at the retail level, it is doubtful they will decline as quickly. Retailers are looking to make up for the losses they likely incurred during late March and April. Therefore, it will be a long slow march through the rest of the year as retail beef prices soften. There is no guarantee the prices will be back to pre-COVID-19 levels by the end of the year.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 17 Auction Direct

Video/net

Total
 

149,100

(+14,600)

96,100

(+23,100)

325,400

(n/a)

570.600

(+263,100)

 

 

CME Feeder Index

CME Feeder Index* July 16 Change
  $136.61 +  $1.69

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 17 Change
600-700 lbs. $151.31 –    $8.53
700-800 lbs. $142.78 –    $2.69
800-900 lbs. $137.51 –    $1.81

 

South Central

Steers-Cash July 17 Change
500-600 lbs. $152.26 + $4.26
600-700 lbs. $145.21 + $2.60
700-800 lbs. $139.13 + $4.02

 

Southeast

Steers-Cash July 17 Change
400-500 lbs. $144.81 –  $0.67
500-600 lbs. $137.17 –  $0.25
600-700 lbs. $129.81 –  $1.91

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 17 ($/cwt) Change
Choice $200.47 –  $4.03
Select $190.31 –  $3.98
Ch-Se Spread $10.16 –  $0.05

 

Futures

Feeder Cattle  July 17 Change
Aug $142.700 + $6.950
Sep $143.325 + $6.000
Oct $143.600 + $5.100
Nov $143.850 + $4.125
Jan ’21 $142.400 + $3.425
Mar $141.600 + $2.950
Apr $142.450 + $3.275
May $142.750 + $3.375

 

Live Cattle   July 17 Change
Aug $103.275 + $3.275
Oct $106.875 + $2.300
Dec $110.700 + $2.300
Feb ’21 $113.775 + $2.050
Apr $114.975 + $1.250
Jun $108.725 + $1.050
Aug $107.775 + $1.325
Oct $109.800 + 1.725
Dec $111.875 + $1.750

 

Corn  July 17 Change
Sep $3.330 – $0.042
Dec $3.396 – $0.050
Mar ’21 $3.496 – $0.054
May $3.560 – $0.052
Jly $3.606 – $0.056
Sep $3.604 – $0.038

 

Oil CME-WTI July 17 Change
Aug $40.59 + $0.04
Sep $40.75 –  $0.01
Oct $40.94 -0-
Nov $41.11 + $0.01
Dec $41.27 + $0.02
Jan ’21 $41.42 + $0.02

 

Equities

Equity Indexes July 17 Change
Dow Industrial Average  26671.95 + 596.65
NASDAQ  10503.19 –  114.95
S&P 500   3224.73 +    39.69
Dollar (DXY)       96.01 –       0.65
Cattle Current Weekly Highlights—Week ending July 17, 2020 2020-07-27T16:30:21-05:00

Cattle Current Weekly Highlights—Week ending July 10, 2020

Calves and feeder cattle sold mixed last week, with stark regional variation. Steers and heifers sold $4-$9/cwt. higher in the North Central region, but $2 lower to $2 higher in the South Central and Southeast regions, according to the Agricultural Marketing Service (AMS).

“There have been some positive signs of the feeder cattle market recovering, which brings optimism to many,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, it is still going to be a long haul before the market is fully recovered.”

Feeder Cattle futures closed an average of $1.62 higher week to week on Friday, compared to the previous Thursday.

Fed Cattle Prices Steady to Higher

Negotiated cash fed cattle prices last week were generally steady to a touch stronger, leading some to wonder of the price bottom is established. Others suspect more pressure amid increasing beef production.

The weighted average five-area direct fed steer price through Thursday was $95.97/cwt. on a live basis and $157.67 in the beef. That was $1.06 and $3.84 higher, respectively.

In the latest monthly World Agricultural Supply and Demand Estimates (WASDE), analysts with USDA’s Economic Research Service (ERS) project the five-area direct weighted average steer price at $100/cwt. in the third quarter and at $103 in the fourth quarter for an annual average price of $106.80. That’s $1.80 less than the June projection. The projected annual price next year is $110, with prices estimated at $104 in the first quarter and $105 in the second.

Live Cattle futures closed an average of $1.47 higher week to week on Friday, compared to the previous Thursday (57¢ to $2.47 higher).

Griffith points out Aug Live Cattle ground its way back to $100, while Oct and Dec are trading above $100.

“The reason this is optimistic is because there is nothing in the cattle feeder’s favor right now,” Griffith says. “Coronavirus hit the market hard. Now, the seasonal tendencies of finished cattle prices are weighing on the market. On top of what is going on in the cattle market, corn futures prices have increased even though they are beginning to ease a little.”

WASDE estimated corn production for this year at 15.0 billion bu., which was 995 million bu. less (-6.22%) than the previous month’s estimate, given the 5 million fewer planted acres projected in June’s Acreage report.

Corn production, with projected yield of 178.5 bu./acre, would be 1.38 billion bu. more than last year (+10.16%). With 2020-2021 supply declining more than use, the forecast season-average corn price received by producers was raised 15¢ to $3.35/bu. 

Wholesale Values Normalize

Wholesale beef values appear to about back into balance.

Choice boxed beef cutout value was 94¢ lower week to week on Friday (compared to the previous Thursday) at $204.50/cwt. Select was $4.47 lower at $194.29.

“The wholesale beef market is remaining surprisingly strong, given the cattle slaughter rate and total beef production. Weekly beef production has consistently exceeded year-ago levels for several weeks now. This is expected to continue until all of the backlogged cattle are harvested,” Griffith says. “Increased beef production is likely to continue even after the backlog is cleared with heavier cattle coming to market. The key to beef and cattle prices strengthening will be the demand side of the market, because the supply side is firm.”

USDA estimated total federally inspected cattle slaughter for the week ending July 11 at 664,000 head, which would be 6,000 head more than the same week last year. Estimated beef production for the week of 550.3 million lbs. would be 22.3 million lbs. more (+4.22%) than the prior year. Year-to-date beef production is estimated at 13.63 billion lbs., which would be 427 million lbs. less (-3.04%) than the same period last year.

AMS analysts point out 83.7% of carcasses graded Choice and Prime for the week ending June 27. That was 6.6% more than the same time a year earlier. “Most of this is due to cattle being fed for a longer period, with some being fed around 200 days,” they say.

Total red meat production under federal inspection is projected at 1.11 billion lbs., which would be 71.7 million lbs. more (+6.89%) than the same week a year earlier. Year-to-date total red meat production is estimated at 28.18 billion lbs., which would be 318.10 million lbs. less (-1.12%) than the same time last year.

Coronavirus Pressures Beef Demand

Beef demand faces continued challenge, both from economic damage already wrought by COVID-19, and with increasing domestic infections.

Internationally, consider U.S. beef exports in May, which were 33% less than a year earlier at 79,280 metric tons (mt)—the lowest monthly total in 10 years—according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was 34% less than the same time last year at $480.1 million.

“As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports,” explains USMEF President and CEO Dan Halstrom. “Unfortunately, the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies.”

Domestically, Griffith explains, “Increased coronavirus cases in many states the past several weeks resulted in many states and local municipalities reverting back to more strict social distancing, as well as adding new precautions. This reversion is sure to negatively influence restaurants again as fewer customers can walk through the doors and because many consumers will revert back to more at-home meals.”

As mentioned in Cattle Current earlier in the week, U.S. restaurant customer transactions stalled for the second week in a row, amid increasing COVID-19 cases in some states, according to The NPD Group (NPD).

For the week ending June 28, total customer transactions at major U.S. restaurant chains were down 14% versus the same week a year ago.  That’s a 1% decline from the previous week, based on NPD’s CREST®Performance Alerts.

Nationwide, full service restaurant customer transactions were 25% less than a year earlier, for the week ending June 28. That was a 1% weekly decline overall, while transactions fell 6-9% in states where coronavirus is increasing.

“It’s apparent that the road to recovery is going to be a challenging one for the U.S. restaurant industry,” says David Portalatin, NPD food industry advisor. “Consumer demand is there, as is the want for normalcy, but there is nothing normal about this situation.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 10 Auction Direct

Video/net

Total
 

134,500

(+50,800)

73,000

(+39,400)

n/a

(n/a)

207,500

(+58,300)

 

 

CME Feeder Index

CME Feeder Index* July 9 Change
  $134.92 +  $6.04

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 10 Change
600-700 lbs. $159.84 +   $11.72
700-800 lbs. $145.47 +   $9.05
800-900 lbs. $139.32 +   $5.20

 

South Central

Steers-Cash July 10 Change
500-600 lbs. $148.00 –  $3.47
600-700 lbs. $142.61 –  $0.70
700-800 lbs. $135.11 + $1.05

 

Southeast

Steers-Cash July 10 Change
400-500 lbs. $145.48 –  $0.26
500-600 lbs. $137.42 –  $2.54
600-700 lbs. $131.72 –  $0.43

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 10 ($/cwt) Change
Choice $204.50 –  $0.94
Select $194.29 –  $4.47
Ch-Se Spread $6.682 + $3.53

 

Futures

Feeder Cattle  July 10 Change
Aug $135.750 + $0.875
Sep $137.325 + $1.475
Oct $138.500 + $1.800
Nov $139.275 + $1.925
Jan ’21 $138.975 + $1.900
Mar $138.650 + $1.825
Apr $139.175 + $1.225
Aug $139.375 + $1.925

 

Live Cattle   July 10 Change
Aug $100.000 + $0.600
Oct $104.575 + $1.900
Dec $108.400 + $2.475
Feb ’21 $111.725 + $1.975
Apr $113.725 + $1.650
Jun $107.765 + $1.665
Aug $106.450 + $1.300
Oct $108.075 + 0.575
Dec $110.125 + $1.125

 

Corn  July 10 Change
Jly  $3.404 – $0.020
Sep $3.372 – $0.062
Dec $3.446 – $0.088
Mar ’21 $3.550 – $0.100
May $3.612 – $0.094
Jly $3.662 – $0.084

 

Oil CME-WTI July 10 Change
Aug $40.55 –  $0.10
Sep $40.76 -0-
Oct $40.94 + $0.03
Nov $41.10 + $0.08
Dec $41.25 + $0.14
Jan ’21 $41.40 + $0.22

 

Equities

Equity Indexes July 10 Change
Dow Industrial Average  26075.30 + 247.94
NASDAQ  10617.44 + 409.81
S&P 500   3185.04 +    55.03
Dollar (DXY)       96.66 –       0.57
Cattle Current Weekly Highlights—Week ending July 10, 2020 2020-07-12T19:06:41-05:00

Cattle Current Weekly Highlights—Week ending July 2, 2020

Despite the continued decline in negotiated cash fed cattle prices and wholesale beef values, more optimism returned to Cattle futures, helping lift cash and feeder cattle prices. Keep in mind, the week was one day shorter due to observation of Independence Day.

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

Except for an average of 12¢ lower in the back contract, Feeder Cattle futures closed an average of $1.05 higher to week on Thursday (65¢ to $1.62 higher in spot Aug).

Dry conditions continue to expand, though, impacting some marketing decisions. According to the U.S. Drought Monitor, 45.42% of the continental United States was ranked as abnormally dry to extreme drought for the week of July 2. That was 35.46% more than the same time last year.

AMS analysts note that cattle are coming to town off dry summer grass or out of grow yards in droughty areas of the Southern Plains and Northern Plains. They add that cows are starting to come to market in Wyoming and western Nebraska. The same goes for parts of Colorado, per other reports.

According to the most recent Crop Progress report for the week ending June 28, 42% of pasture and range was rated in Good or Excellent condition, which was 33% less than the same time a year earlier. 26% was rated in Poor or Very Poor condition, compared to 7% at the same time last year.

Feed costs also took on a more bearish tone last week with USDA’s lower estimate for corn acres. 

Corn acreage is projected at 92.01 million acres, in last week’s Acreage report. That would be 2.31 million acres more (+2.57%) than last year. However, the projection is about 5 million acres less than the initial outlook in USDA’s Prospective Plantings report that came out at the end of March. Acreage harvested for grain is forecast at 84.02 million acres, which would be 2.70 million acres more (+3.32%) than last year.

Corn futures closed an average of 24¢ higher through the front six contracts week to week on Thursday.

“The higher expected corn price has to enter into the decision making process for cattle feeders as they bid on feeder cattle,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This one report does not mean the expected corn price will remain elevated moving through the next 12 months, but it does put another component of the overall cattle industry back into play.

“At the same time, cow-calf and stocker producers may have to reconsider their grain supplement plan if it is highly dependent on purchasing corn. The one bright side for many parts of the country is that precipitation has been adequate if not abundant, which continues to support forage production.”

Cull cow prices remain a relative bright spot, according to Josh Maples, Extension livestock economist at Mississippi State University. In the latest issue of In the Cattle Markets he explains slaughter cow prices in the Southern Plains averaged $57.84/cwt. over the past six weeks of available data, which is 19.5% above the same period in 2019.

Total cow slaughter so far this year is about par with 2019, with beef cow slaughter up about 2% and dairy cow slaughter down about 2%, according to Maples.

Fed Cattle Prices Steady to Lower

Negotiated cash fed cattle trade ended the holiday-shortened week steady to $2 lower on a live basis in the Southern Plains at $93-$95/cwt.; steady to $1 higher in Nebraska at $95-$96 and unevenly steady in the western Corn Belt at $96-$97. Dressed trade was $1 lower in Nebraska at $154-$155 and steady to $4 lower in the western Corn Belt at $152-$155.

Live Cattle futures closed an average of $2.38 higher week to week on Thursday ($1.37 higher to $3.32 higher in spot Aug).

Choice boxed beef cutout value was $2.82 lower week to week on Thursday at $205.44/cwt. Select was $1.17 lower at $198.76.

“With larger production available, packing plants continue to refill the pipeline and increase beef items to consumers,” say AMS analysts. “Beef and pork will have to find price levels to clear record production that will persist for several months.”

Although recent holidays supported beef demand, Griffith notes it was muted, compared to normal times, as the pandemic and social unrest kept some consumers closer to home. He adds that most beef product still must flow through the retail channel as many restaurants remain limited to drive-thru, curbside pickup and limited seating capacity.

“At the same time, sales that would have occurred at ball games or during vacation are practically non-existent,” Griffith says. “While all of this is happening, one also has to consider discretionary spending. Many consumers’ incomes have declined the past several months, which leaves them with few dollars to spend, which could mean less beef for some. Labor Day will wrap up the summer grilling season, and it may be the benchmark to know how the market is fairing.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 2* Auction Direct

Video/net

Total
 

79,600

(-76,300)

33,600

(-21,400)

15,900

(-44,700)

129,100

(-142,400)

*Reflects volume for Monday through Thursday.

 

CME Feeder Index

CME Feeder Index* July 1 Change
  $129.05 –   $0.77

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 2 Change
600-700 lbs. $148.12 –   $7.93
700-800 lbs. $136.42 –   $6.82
800-900 lbs. $134.12 +   $1.89

 

South Central

Steers-Cash July 2 Change
500-600 lbs. $151.47 + $0.78
600-700 lbs. $143.31 + $1.72
700-800 lbs. $134.06 + $0.92

 

Southeast

Steers-Cash July 2 Change
400-500 lbs. $145.74 –  $0.99
500-600 lbs. $139.96 + $0.07
600-700 lbs. $132.15 + $0.81

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 2 ($/cwt) Change
Choice $205.44 –  $2.82
Select $198.76 –  $1.17
Ch-Se Spread $6.682 –  $1.65

 

Futures

Feeder Cattle  July 2 Change
Aug $134.875 + $1.625
Sep $135.850 + $1.350
Oct $136.700 + $1.250
Nov $137.350 + $0.775
Jan ’21 $137.075 + $0.650
Mar $136.825 + $0.775
Apr $137.950 + $0.925
Aug $137.450 –  $0.125

 

Live Cattle   July 2 Change
Aug $99.400 + $3.325
Oct $102.675 + $3.025
Dec $105.925 + $2.375
Feb ’21 $109.750 + $2.400
Apr $112.075 + $2.275
Jun $106.100 + $2.300
Aug $105.150 + $2.000
Oct $107.500 + $1.375
Dec $109.000 n/a

 

Corn  July 2 Change
Jly  $3.424 + $0.252
Sep $3.434 + $0.230
Dec $3.534 + $0.254
Mar ’21 $3.650 + $0.256
May $3.706 + $0.234
Jly $3.746 + $0.212

 

Oil CME-WTI July 2 Change
Aug $40.65 + $1.93
Sep $40.76 + $1.85
Oct $40.91 + $1.83
Nov $41.02 + $1.76
Dec $41.11 + $1.68
Jan ’21 $41.18 + $1.61

 

Equities

Equity Indexes July 2 Change
Dow Industrial Average  25827.36 +  81.76
NASDAQ  10207.63 + 190.63
S&P 500   3130.01 +  46.25
Dollar (DXY)       97.23 –       0.16
Cattle Current Weekly Highlights—Week ending July 2, 2020 2020-07-12T19:07:45-05:00

Cattle Current Weekly Highlights—Week ending June 26, 2020

Cash fed cattle prices continued to soften last week as beef production increases and uncertainty grows, relative to how soon the U.S. economy can reopen. At the same time, calf and feeder cattle prices held their own.

Nationwide, steers and heifer sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). Those analysts note that the most advance came in the North Central region, with overall demand strongest for yearlings.

Except for an average of 11¢ lower in two contracts, Feeder Cattle futures closed an average of 51¢ higher to week on Friday.

“Calf prices will be hard-pressed to find support from now through November. At the same time, summer yearling cattle will be coming to market the next eight to 10 weeks. Prices for these cattle are generally strong during the summer months, which is largely due to cattle supply and when the cattle will be coming off feed, but it is also a factor of generally lower feed costs and good performance through summer and fall,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The problem this year is that placements of many cattle were delayed the past several months, which most likely means more animals to be placed in July, August, and September. This is further exacerbated by expectations of strong beef production moving through the third and fourth quarters of 2020, as well as the first quarter of 2021.”

Dry conditions and expanding drought will likely alter some marketing plans, too. According to the latest U.S. Drought Monitor (June 23), 43.74% of the continental U.S. was rated as abnormally dry (D0) to Extreme Drought (D3), versus 10.10% a year earlier.

Nationally, pasture and range conditions continue to erode, according USDA’s weekly Crop Progress report, with 43% of pasture and range rated in Good or Excellent condition for the week ending June 21. That was 2% less than the previous week and 25% less than last year. 25% was rated in Poor or Very Poor condition, compared to 8% at the same time last year.

“The fundamentals of the feeder cattle market provide little support to expect prices to move much in either direction,” Griffith says. “The failure of prices to reach beginning-of-the-year expectations will likely result in increased cow marketing and reduce the size of the breeding herd. This will result in positive price implications moving forward.”

Fed Cattle Prices Continue Decline

Negotiated cash fed cattle prices ended the week solidly lower, according to reports from the Agricultural Marketing Service. Regionally, live prices were $5-$7 lower in the Texas Panhandle at $93-$95, $5 less in Kansas at $95, $3-$7 lower in Nebraska at $95 and $1-$4 less in the western Corn Belt at $98. Dressed trade was $3-$7 less at $155-$156 in Nebraska and at $153-$156 in the western Corn Belt.

The five-area average direct fed steer price through Thursday was $96.24/cwt. on a live basis, which was $4.58 lower than the previous week and $14.34 less than the same period a year earlier. The average dressed steer price was $154.78, which was $5.96 less than the prior week and $24.58 less than a year earlier.

Except for unchanged to an average of 49¢ higher in the front four contracts, Live Cattle futures closed an average of 76¢ lower week to week on Friday.

“Finished cattle prices have converged to Live Cattle futures…The failure of the futures market to bend in the slightest is not a good sign for summer cattle marketing,” Griffith explains. “The June contract is rolling off, which makes the August contract the next destination, and it is trading ever so slightly higher than the June contract. The answer to this market turning around will most likely show up in finished cattle weights. Once finished cattle weights begin to decline, the price for finished cattle will find support. The reason a decline in finished weight will be the turnaround is because it will mark when we are finished working through the backlog of cattle.”

Wholesale Beef Values Lose Ground

Continued delays in the return of food service demand for beef—tied to ongoing closures and reduced restaurant capacity forced by COVID-19—and the recently higher retail beef prices continue to pressure wholesale beef values.

Choice boxed beef cutout value was $6.55 lower week to week on Friday at $207.17/cwt. Select was $5.06 lower at $198.85. Prices at the same time a year ago were $219.70 and $198.56, respectively.

“Wholesale boxed beef prices have dropped nearly back to pre-COVID-19 levels and may go lower into mid-summer as abundant third-quarter beef production could highlight potential recessionary demand weakness,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-week market comments.

Even as cattle slaughter continues to recover from disruptions wrought by the pandemic, the backlog of fed cattle continues to add days on feed and pounds per carcass.

Year to date, Peel notes steer and heifer carcass weights averaged 27.4 lbs. heavier year over year. Carcasses were an average of 20.4 lbs. heavier in the first quarter; 36.7 lbs. heavier for April 1 to June 6.

USDA estimated total cattle slaughter for last week at 680,000 head, which would be 3.7% more than the previous week and 1.5% more than the same week last year. Total beef production under federal inspection was estimated at 562.3 million lbs., which would be 3.9% more than the previous week and 5.3% more than the same week last year.

“The expectation is that production in the third and fourth quarters of 2020 will far exceed beginning-of-the-year projections, “Griffith says. “The January World Agricultural Supply and Demand Estimates (WASDE) projected third and fourth-quarter beef production to be 6.88 and 6.93 billion lbs., respectively. The June report projected third and fourth-quarter beef production at 6.92 and 6.83 billion pounds, respectively. Essentially, the WASDE report indicates little to no change in production over the next six months, but heavier carcasses and maintaining current slaughter rates should result in year-over-year increases in beef production.”

For January through May, 7.4% fewer fed steers and heifers were slaughtered, while federally inspected beef production was only 3.4% less, according to USDA’s monthly Livestock Slaughter report. That was with 0.8% less total cow slaughter.

 

Friday to Friday Change

 

Weekly Auction Receipts

 

June 26 Auction Direct

Video/net

Total
 

155,900

(-4,500)

55,500

(+8,500)

60,600

(+50,900)

271,500

(+54,900)

 

CME Feeder Index

CME Feeder Index* June 25 Change
  $130.04 +   $2.03

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 26 Change
600-700 lbs. $156.05 +   $3.19
700-800 lbs. $143.24 +   $5.99
800-900 lbs. $132.23 +   $3.85

 

South Central

Steers-Cash June 26 Change
500-600 lbs. $150.69 + $2.47
600-700 lbs. $141.59 + $0.99
700-800 lbs. $133.14 + $1.34

 

Southeast

Steers-Cash June 26 Change
400-500 lbs. $146.73 –  $1.02
500-600 lbs. $139.89 + $0.31
600-700 lbs. $131.34 + $0.78

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 26 ($/cwt) Change
Choice $207.17 –  $6.55
Select $198.85 –  $5.06
Ch-Se Spread $8.32 –  $1.49

 

Futures

Feeder Cattle  June 26 Change
Aug $132.600 + $0.050
Sep $133.775 –  $0.100
Oct $134.725 –  $0.125
Nov $135.675 + $0.100
Jan ’21 $135.225 + $0.375
Mar $134.300 + $0.300
Apr $135.275 + $0.600
Aug $136.650 + $1.650

 

Live Cattle   June 26 Change
Jun $94.700 -0-
Aug $95.400 + $0.625
Oct $98.850 + $0.625
Dec $102.850 + $0.225
Feb ’21 $107.275 –  $0.525
Apr $109.875 –  $1.025
Jun $103.650 –  $0.775
Aug $103.050 –  $0.725
Oct $105.900 –  $0.750

 

Corn  June 26 Change
Jly  $3.170 – $0.154
Sep $3.192 – $0.180
Dec $3.252 – $0.200
Mar ’21 $3.366 – $0.200
May $3.444 – $0.186
Jly $3.510 – $0.166

 

Oil CME-WTI June 26 Change
Aug $38.49 –  $1.34
Sep $38.65 –  $1.28
Oct $38.80 –  $1.22
Nov $38.94 –  $1.16
Dec $39.07 –  $1.12
Jan ’21 $39.19 –  $1.08

 

Equities

Equity Indexes June 26 Change
Dow Industrial Average  25015.55 –  855.91
NASDAQ    9757.22 –  188.90
S&P 500   3009.05 –    88.69
Dollar (DXY)       97.50 –       0.16
Cattle Current Weekly Highlights—Week ending June 26, 2020 2020-06-28T15:23:52-05:00

Cattle Current Weekly Highlights—Week ending June 19, 2020

Depending on weight and location, some classes of calves and feeder cattle came under pressure last week as dry conditions spread and the cash fed cattle market succumbed to the backlog of market-ready cattle, declining wholesale beef values and iffy near-term domestic demand.

Nationwide, steers and heifers traded steady to $4/cwt. lower, according to the Agricultural Marketing Service (AMS).

Still, Feeder Cattle futures closed an average of $2.00 higher to week on Friday.

“The expectation is the market will remain under pressure through the end of fall as the industry works through large supplies of cattle and meat,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cattle prices will start to gain a little momentum in the first quarter of 2021 before really accelerating in the second and third quarter of 2021…This is the expectation because it is likely more cows will be culled this year, as well as fewer heifers retained for breeding, due to lower cattle prices and the need for cash flow. Thus, the increased marketings in the short run will place added pressure on prices while at the same time providing support for prices moving into the longer run.”

Based on recent price data, USDA’s Economic Research Service (ERS) increased the projected annual average feeder steer price (basis Oklahoma City) by almost $7, compared to the previous month, to $131.40/cwt.

“With higher anticipated fed cattle slaughter in 2020, feedlot marketings will increase. A faster pace of marketings and higher forecast fed cattle prices than last month will likely improve feedlot demand for feeder cattle,” say ERS analysts, in the latest monthly Livestock, Dairy and Poultry Outlook.

Heading into this week, the market could see added pressure from the monthly Cattle on Feed report, which will likely be viewed as at least somewhat bearish.

Compared to average expectations ahead of the report, more cattle were placed, fewer were marketed and slightly more were on feed at the beginning of the month. That’s for feedlots with 1,000 head or more capacity.

Placements in May of 2.04 million head were 26,000 head fewer (-1.26%) than the previous year.

Marketings in May of 1.5 million head were 570,000 head fewer (-27.54%) than a year earlier and the least marketings for the month since the data series began in 1996.

There were 11.67 million head on feed June 1, which was 57,000 head fewer (-0.49%) than a year earlier. That’s the second highest June inventory since the data series began in 1996.

Moreover, expanding dryness could hamper intentions and prices as the summer unfolds.

According USDA’s weekly Crop Progress report (week ending June 14), 45% of nation’s pasture and range was rated in Good (39%) or Excellent (6%) condition. That’s 26% less than last year. 22% was rated in Poor (14%) or Very Poor (8%) condition, compared to 6% at the same time last year.

Fed Cattle Prices Lower

Through Thursday, the five-area direct weighted average price for steers was $100.82/cwt., which was  $4.02 less than the previous week. The average dressed steer price was $160.74, which was $5.91 less. Prices at the same time last year were at $110.43 and $180.56, respectively. Keep in mind that carcass weights are contra-seasonal and significantly heavier than last year.

The average dressed steer weight for the week ending June 6 was 892 lbs., which was 1 lb. heavier than the prior week and 46 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 824 lbs. was 2 lbs. lighter than the previous week, but 42 lbs. heavier than the prior year.

“The expectation was for finished cattle prices to decline but not $15/cwt. in three weeks,” Griffith says. “The lower prices speak volumes concerning the supply of market-ready cattle and the fact packers have plenty of cattle available to them. One would have thought there was price support at current prices and one can continue to think that based on this week’s prices, but there will continue to be pressure on finished cattle prices moving through the next couple of months. This is not a good sign for cattle feeders or those looking to market feeder cattle in the near term. It may take a while before optimism comes back to the finished cattle market.”

Other than $1.37 lower in spot Jun, Live Cattle futures closed an average of $1.13 higher week to week on Friday (7¢ to $1.65 higher).

Estimated total cattle slaughter for the week of 656,000 head was just 12,000 head fewer (-1.8%) than the same time last year, according to USDA.

The average five-area direct fed steer price in May was $111.53/cwt. on a live basis, which was more than 9% higher than in April, according to ERS. With that in mind, USDA increased its price forecast for fed steers in the second quarter by $3 to $104. Forecast prices for the third and fourth quarters increased by $6 to $105 and $106, respectively.

Wholesale Values Normalizing

Wholesale beef values continue lower with increased beef production.

Choice boxed beef cutout value was $16.92 lower week to week on Friday at $213.72/cwt. Select was $15.36 lower at $203.91.

“The red meat market has traversed some unfamiliar territory the past several months and probably still has a few new trails to cut before some form of normalcy is evident,” Griffith says. “The two broad markets the beef industry navigates are the domestic market and the international market. The international market is a major player in determining the full value of cattle produced domestically, which points to the importance of beef and cattle product exports. Through the first four months of 2020, beef and veal exports on a quantity basis were 7.0% greater than the same four months in 2019. However, beef and veal export value only increased 3.2% for January through April of 2020 compared to 2019. There is a good chance May 2020 beef and veal exports will have struggled compared to year-ago levels, given that May beef production was 19.2% lower than the same month one year ago.”

 

Friday to Friday Change

 

Weekly Auction Receipts

 

June 19 Auction Direct

Video/net

Total
 

160,400

(+100)

46,500

(+12,700)

9,700

(-36,300)

216,600

(+23,800)

 

CME Feeder Index

CME Feeder Index* June 18 Change
  $128.01 –   $1.57

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 19 Change
600-700 lbs. $152.86 –    $0.38
700-800 lbs. $137.25 –    $4.18
800-900 lbs. $128.38 –    $4.45

 

South Central

Steers-Cash June 19 Change
500-600 lbs. $148.22 –  $2.52
600-700 lbs. $140.60 –  $0.63
700-800 lbs. $131.80 –  $0.12

 

Southeast

Steers-Cash June 19 Change
400-500 lbs. $147.75 –  $1.43
500-600 lbs. $139.58 –  $2.57
600-700 lbs. $130.56 –  $1.80

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 19 ($/cwt) Change
Choice $213.72 –  $16.92
Select $203.91 –  $15.36
Ch-Se Spread $9.81 –  $1.56

 

Futures

Feeder Cattle  June 19 Change
Aug $132.550 + $1.450
Sep $133.875 + $1.400
Oct $134.850 + $1.700
Nov $135.575 + $2.100
Jan ’21 $134.850 + $2.400
Mar $134.000 + $2.650
Apr $134.675 + $2.300
Aug $135.000 + $2.025

 

Live Cattle   June 19 Change
Jun $94.700 –  $1.375
Aug $95.400 + $0.075
Oct $98.850 + $0.850
Dec $102.850 + $0.800
Feb ’21 $107.275 + $1.275
Apr $109.875 + $1.425
Jun $103.650 + $1.650
Aug $103.050 + $1.500
Oct $105.900 + $1.475

 

Corn  June 19 Change
Jly  $3.324 +$0.024
Sep $3.372 +$0.028
Dec $3.452 +$0.022
Mar ’21 $3.566 +$0.020
May $3.630 +$0.018
Jly $3.676 +$0.014

 

Oil CME-WTI June 19 Change
Jly $39.75 + $3.49
Aug $39.83 + $3.32
Sep $39.93 + $3.15
Oct $40.02 + $3.02
Nov $40.10 + $2.89
Dec $40.19 + $2.77

 

Equities

Equity Indexes June 19 Change
Dow Industrial Average  25871.46 + 265.92
NASDAQ    9946.12 + 357.31
S&P 500    3097.74 +   56.43
Dollar (DXY)       97.66 +      0.57
Cattle Current Weekly Highlights—Week ending June 19, 2020 2020-06-21T12:33:26-05:00

Cattle Current Weekly Highlights—Week ending June 12, 2020

Cash calf and feeder cattle prices were mixed last week, amid plenty of volatility in equity markets, declining wholesale beef prices and pressure on cash fed cattle.

Steers and heifers sold steady to $2/cwt. higher in the North Central region, but steady to $4 lower in the South Central and Southeast regions, according to the Agricultural Marketing Service (AMS).

“With the slaughter pace inching closer to normal and beef cutout values dropping, the focus may soon turn to the surplus of market ready cattle that history says will have to be whittled away at by getting to a price low enough to stimulate surplus demand (see below),” noted the AMS reporter on hand for Wednesday’s weekly sale at South Central Regional Stockyards in Vienna, MO.

Feeder Cattle futures closed an average of $2.94 lower to week on Friday.

“The fact that fresh-weaned calf prices are not declining speaks to strength in the market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Prices for lightweight calves typically reach their apex in March and then seasonally decline through the summer and fall months…The market did not experience its seasonal peak because coronavirus shut everything down.”

Griffith explains feeder cattle weighing less than 800 lbs. are garnering the most feedlot demand because lighter cattle offer more opportunity to work through the backlog of market-ready fed cattle.

Cow Culling Likely to Increase

Dry conditions and drought continue to expand, according to the latest U.S. Drought Monitor (June 11), with 38.6% of the continental U.S. rated as abnormally dry (D0) to Extreme Drought (D3), versus 10.6% a year earlier.

Much of the affected area ranges from Colorado west and up through the Northwest, as well as northern New Mexico, western Kansas and the Panhandles of Oklahoma and Texas.

A couple of year’s worth of anemic economic cow-calf returns, and now those dry conditions, continue to boost beef cow slaughter, helped along by stronger cull cow values.

According to AMS, year-to-date beef cow slaughter through May 31 (preliminary) is 1.5% more than a year ago and about 15% more than the previous five-year average. Keep in mind that cow slaughter the past couple of months was likely muted by disruptions in packing capacity.

Rather than the short and shallow liquidation phase many expected at the beginning of the year, it now appears a more conventional cyclical liquidation phase is in the cards.

Fed Cattle Prices Turn Sharply Lower

Through Thursday, the average five-area direct fed steer price (AMS) was $104.84 on a live basis, compared to $112.68 the previous week. The dressed steer price was $166.65, versus $179.17 the prior week.

Regionally, live prices were $3-$4 lower in the Southern Plains at $104/cwt. in the Texas Panhandle and at $103-$107 in Kansas. Live trade was $5-$10 lower in Nebraska at $105-$108; $5-$9 less in the western Corn Belt at $103-$105. Dressed trade was $10-$20 lower in Nebraska at $165; $13-$15 lower in the western Corn Belt at $160-$172.

“The available supply of market-ready cattle is high and the demand for cattle cannot physically exceed slaughter capacity. Thus, prices for finished cattle are softening and will remain soft until packers can work through the glut of market-ready cattle,” Griffith says. “This comes at a time when finished cattle prices are seasonally softening as the market moves toward the dog days of summer. How long the backup of cattle can hang over the market is not exactly known. It will depend on how well beef prices are doing and how many Saturdays are utilized. It may take until the fourth quarter of the year before cattle marketings are current.”

Other than $2.17 higher in spot Jun, Live Cattle futures closed an average of $2.04 lower week to week on Friday (85¢ to $2.87 lower at the back).

The average five-area direct live steer price (FOB) in May was $111.53/cwt., which was $9.51 more than the previous month, according to USDA. The average dressed steer price in the beef was $179.02 (delivered), which was $19.75 more than the previous month.

As mentioned in Cattle Current earlier this week, USDA’s Economic Research Service (ERS) increased price projections for this year’s average fed steer price by $4.50 to $108.60/cwt. In the latest monthly World Agricultural Supply and Demand Estimates (WASDE), ERS forecasts fed steer prices to average $106 in the second quarter, $104 in the third quarter and $106 in the fourth quarter. The first-quarter price was $118.32.

Retail Beef Prices Record High

Wholesale beef values continue to decline and normalize as packing capacity recovers.

Estimated cattle slaughter for the week was 658,000 head, according to USDA, which was 22,000 head more (+3.5%) than the previous week; 11,000 head fewer (-1.6%) than the same week last year. Estimated year-to-date cattle slaughter of 13.97 million head is 957,000 head fewer (-6.4%) than the same time a year ago. However, heavier carcass weights contributed to the fact that beef production for the week was 2.1% more than the same week last year at 542.2 million lbs.

Choice boxed beef cutout value was $30.84 lower week to week on Friday at $230.64/cwt. Select was $27.15 lower at $219.27.

Sky-high wholesale prices, especially from the second half of April and throughout May mean consumers will likely be paying higher prices for a while.

“Those high wholesale prices led to major changes in retail prices. Since the price series has been recorded, dating back more than 30 years, the all fresh retail price for beef hit a record high in May, coming in just under $7.05/lb.,” Griffith says. “This is $1.08 higher than the all fresh retail price of beef reported in March. Thus, retail beef prices increased 18% the past two months and that may not be the end. There is no doubt wholesale beef prices have moderated the past several weeks and will continue to do so. However, this does not mean retail prices will decline quickly. Retailers will be looking to recapture some of their losses from April and May, which means retail beef prices will remain elevated.”

Friday to Friday Change

 

Weekly Auction Receipts

 

June 12 Auction Direct

Video/net

Total
 

160,300

(-46,800)

33,800

(-53,600)

46,300

(+35,600)

240,400

(-64,800)

 

CME Feeder Index

CME Feeder Index* June 11 Change
  $129.58 +  $1.65

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 12 Change
600-700 lbs. $153.21 +   $1.18
700-800 lbs. $141.43 –    $0.03
800-900 lbs. $132.83 +   $2.41

 

South Central

Steers-Cash June 12 Change
500-600 lbs. $150.74 –  $3.49
600-700 lbs. $141.23 –  $1.92
700-800 lbs. $131.92 –  $0.80

 

Southeast

Steers-Cash June 12 Change
400-500 lbs. $149.18 –  $1.45
500-600 lbs. $142.15 –  $0.03
600-700 lbs. $132.36 –  $0.30

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 12 ($/cwt) Change
Choice $230.64 –  $30.84
Select $219.27 –  $27.15
Ch-Se Spread $11.37 –  $3.69

 

Futures

Feeder Cattle  June 12 Change
Aug $131.000 –  $3.175
Sep $132.475 –  $3.000
Oct $133.150 –  $2.925
Nov $133.475 –  $3.075
Jan ’21 $132.450 –  $2.800
Mar $131.350 –  $3.150
Apr $132.375 –  $2.800
Aug $132.975 –  $2.625

 

Live Cattle   June 12 Change
Jun $96.075 + $2.175
Aug $95.325 –  $0.850
Oct $98.000 –  $1.300
Dec $102.050 –  $1.775
Feb ’21 $106.000 –  $2.050
Apr $108.450 –  $2.300
Jun $102.000 –  $2.475
Aug $101.550 –  $2.750
Oct $104.425 –  $2.875

 

Corn  June 12 Change
Jly  $3.300 – $0.012
Sep $3.344 – $0.010
Dec $3.430 – $0.022
Mar ’21 $3.546 – $0.024
May $3.612 – $0.020
Jly $3.662 – $0.020

 

Oil CME-WTI June 12 Change
Jly $36.26 –  $3.29
Aug $36.51 –  $3.29
Sep $36.78 –  $3.25
Oct $37.00 –  $3.15
Nov $37.21 –  $3.07
Dec $37.42 –  $3.00

 

Equities

Equity Indexes June 12 Change
Dow Industrial Average  25605.54 –  1505.54
NASDAQ    9588.81 –   225.27
S&P 500    3041.31 –   152.62
Dollar (DXY)       97.09 +      0.14
Cattle Current Weekly Highlights—Week ending June 12, 2020 2020-06-14T16:25:53-05:00

Cattle Current Weekly Highlights—Week ending June 5, 2020

“Barring a major setback, it appears that beef markets are moving past the worst of the disruptions that have caused upheaval in recent weeks,” said Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-weekly market comments.

Nationwide, steers and heifers sold from $1 lower to $2/cwt. higher, according to the Agricultural Marketing Service (AMS). Regional average calf and feeder cattle prices for the week were within spitting distance of year-over-year levels, the closest since the end of February, according to the National Weekly Feeder and Stocker Cattle Summary.

After $1.17 lower and 27¢ lower in the front two contracts, Feeder Cattle futures closed an average of 85¢ higher week to week on Friday (5¢ higher to $1.22 higher at the back).

Surging equity markets tied to the reopening of the nation’s economy provided overall support.

“It’s too soon to talk too much about markets returning to normal, but the steady improvements associated with the packing industry facing fewer obstacles is a relief (see below),” said Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center.

From the lows of the year, Koontz points out: the five-area weighted average fed steer price is up about $15 at $115/cwt.; 7 to 8-weight feeder prices are up about $15 to $135; 4 to 5-weight calf prices are up about $8 to $170.

“There still remains several unanswered questions in the cattle market moving forward, but price levels for feeder cattle have improved to a point where producers were comfortable marketing some stock,” explained the AMS reporter on hand for Tuesday’s Kingsville Livestock Auction in Missouri, where calves sold steady to $6 lower and yearlings traded steady to $5 higher.

Fed Cattle Prices Sag Lower

Negotiated cash fed cattle prices were lower across a broad range last week. The weighted average five-area direct live steer price was $2.97 lower week to week on Thursday at $112.68/cwt. The dressed price was $4.13 lower at $179.17. Prices were $113.51 and $184.16 at the same time last year.

Live Cattle futures closed an average of $2.52 lower across the front five contracts week to week on Friday (37¢ lower to $5.82 lower in spot Jun) and then an average of 86¢ higher (20¢ higher to $1.22 higher).

Wholesale beef values continue to plunge, adjusting back to more normal fundamentals. Choice boxed beef cutout value was $101.86 lower week to week on Friday at $261.48/cwt. Select was $93.65 lower at $246.42.

Normalizing fundamentals have much to do with increased packing capacity that was significantly reduced by the pandemic.

“Cattle slaughter and beef production decreased on a year-over-year basis for four consecutive weeks. The lowest point occurred the last week of April when total cattle slaughter was down 34.8% year over year. Beef production that same week was down 33.8% compared to the same week one year ago,” Peel says. 

Since then, cattle harvest increased faster than many expected.

Total fed cattle slaughter for the week ending May 23 was 444,378 head, which was 51,816 head more (+13.2%) than the previous week and the most since the first week of April, according to USDA’s Actual Slaughter Under Federal Inspection report. Total cattle slaughter of 571,506 head was 52,383 head more (+10.1%) than the prior week and the most since the first week of April. Compared to the prior year, though, fed cattle slaughter was still 14.5% less and total cattle slaughter was 11.6% less.

Estimated cattle slaughter under federal inspection last week of 636,000 head was 112,000 head more (+21.3%) than the previous week.

“These slaughter numbers will determine when the cattle and beef markets return to more normal relationships,” Koontz says. “There are very large supplies and substantial inventory of long-fed cattle on feed. There has been a steady improvement in fed cattle and feeder cattle prices through last month and into the current. Continued improvement hinges on any further disruptions and steady elevation in slaughter numbers.”

The average dressed steer weight for the week of May 23 was 894 lbs., which was 6 lbs. lighter than the previous week, but 52 lbs. more than the same week a year earlier. The average dressed heifer weight of 826 lbs. was 5 lbs. less than the previous week, but 41 lbs. heavier than the prior year.

Exports Offer Continued Support

Despite the many and varied disruptions wrought by COVID-19, U.S. beef exports are higher year over year.

April beef exports were down 6% from a year ago to 98,613 metric tons (mt), with value falling 11% to $600.9 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). But, exports achieved outstanding growth in Japan, where U.S. beef is benefiting from reduced tariffs under the U.S.-Japan Trade Agreement. Exports also trended higher to China, following the late-March implementation of the U.S.-China Phase One Economic and Trade Agreement.

For January through April, beef exports totaled 433,316 mt, up 5% from a year ago, valued at $2.66 billion (up 3%).

“Considering all the challenges the U.S. red meat industry faced in April, export results were encouraging,” says Dan Halstrom, USMEF president and CEO. “Exporters lost several days of slaughter and processing due to COVID-19, and shipments to Mexico and some other Latin American markets declined due to slumping currencies and the imposition of stay-at-home orders. Despite these significant headwinds, global demand for U.S. beef and pork remained strong.”

Friday to Friday Change

 

Weekly Auction Receipts

 

June 5 Auction Direct

Video/net

Total
 

207,100

(+68,900)

87,400

(+45,400)

10,700

(-46,900)

305,200

(+67,400)

 

CME Feeder Index

CME Feeder Index* June 4 Change
  $127.93 –   $1.43

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 5 Change
600-700 lbs. $152.03 +   $0.09
700-800 lbs. $141.46 –    $0.60
800-900 lbs. $130.42 –    $1.84

 

South Central

Steers-Cash June 5 Change
500-600 lbs. $154.23 –  $1.57
600-700 lbs. $143.15 + $2.91
700-800 lbs. $132.72 + $1.38

 

Southeast

Steers-Cash June 5 Change
400-500 lbs. $150.63 + $0.64
500-600 lbs. $142.18 + $0.49
600-700 lbs. $132.66 + $0.41

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 5 ($/cwt) Change
Choice $261.48 –  $101.86
Select $246.42 –  $93.65
Ch-Se Spread $15.06 –  $8.21

 

Futures

Feeder Cattle  June 5 Change
Aug $134.175 –  $1.175
Sep $135.475 –  $0.275
Oct $136.075 + $0.050
Nov $136.550 + $0.500
Jan ’21 $135.250 + $1.025
Mar $134.500 + $1.100
Apr $135.175 + $1.225
Aug $135.600 + $1.225

 

Live Cattle   June 5 Change
Jun $93.900 –  $5.825
Aug $96.175 –  $3.425
Oct $99.300 –  $2.125
Dec $103.825 –  $0.875
Feb ’21 $108.050 –  $0.375
Apr $110.750 + $0.200
Jun $104.475 + $0.950
Aug $104.300 + $1.225
Oct $107.300 + $1.050

 

Corn  June 5 Change
Jly  $3.312 +$0.056
Sep $3.354 +$0.054
Dec $3.452 +$0.066
Mar ’21 $3.570 +$0.068
May $3.632 +$0.060
Jly $3.682 +$0.058

 

Oil CME-WTI June 5 Change
Jly $39.55 + $4.06
Aug $39.80 + $3.96
Sep $40.03 + $3.83
Oct $40.15 + $3.72
Nov $40.28 + $3.61
Dec $40.42 + $3.50

 

Equities

Equity Indexes June 5 Change
Dow Industrial Average  27110.98 + 1727.87
NASDAQ    9814.08 +  324.21
S&P 500    3193.93 +   149.62
Dollar (DXY)       96.95 –        0.88
Cattle Current Weekly Highlights—Week ending June 5, 2020 2020-06-07T15:42:15-05:00

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