Weekly Market Highlights

Cattle Current Weekly Highlights—Week ending Jan. 15, 2021

Judging by auction reports throughout the week, calves and feeder cattle prices were pressured significantly, overall, by surging grain prices, weaker cash fed cattle prices and volatile Cattle futures. Dangerously high winds in the Dakotas also weighed on receipts and demand at some sales in that region.

The exception to weaker prices was in the Southeast, where states reporting on Friday (Alabama, Florida, Georgia and Mississippi), indicated feeder classes sold generally steady to $1-$5 higher.

The Agricultural Marketing Service will issue its summary from last week on Tuesday.

Week to week on Friday, Feeder Cattle futures closed an average of 72¢ lower through the front five contracts (20¢ to $1.25 lower) and then an average of $1.26 higher. That was with a bounce of an average of $2.02 higher on Friday.

“Since Christmas, January Feeder Cattle futures prices declined $8/cwt. Similarly, March Feeder Cattle futures contract prices are approximately $9 lower, while the August contract has only lost $5 over the same time period,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Soybeans and Corn Climb Higher

Plenty of the aforementioned price pressure stems from the extraordinary and relentless increase in grain prices.

Week to week on Friday, Corn futures closed an average of 30¢ higher through the front six contracts.

“Corn futures prices increased more than $1/bu. since the middle of December,” Griffith says. “If it is assumed that an animal will consume 50 bu. of corn while in the feedlot, then the $1 increase in price means it will cost $50 more in feed costs. That increase would essentially mean that a cattle feeder has to pay $6/cwt. less for an 800-pound steer, if everything else remains the same.”

That’s before considering corn basis, which appears to be strengthening, Griffith explains.

“The Corn futures rally is following soybeans higher, and cash has struggled to keep pace, widening the basis for this time of year. Although exports have been strong, the fundamentals are not currently holding ending stocks tight enough to justify $5 corn,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Still, there seems little to move the futures lower ahead of U.S. plantings and harvest in South America.”

USDA increased the forecast season-average corn price received by producers to $4.20/bu., in the latest monthly World Agricultural Supply and Demand Estimates. That was 20¢more than the previous month, based on lower production and ending stocks.

Week to week on Friday, Soybean futures closed an average of 41¢ higher through the front six contracts. That’s right at an average of $1 higher for those contracts over the last two weeks.

USDA forecast the U.S. season-average soybean price for 2020-21 60¢ higher at $11.15/bu. The soybean meal price was projected $20 higher at $390/short ton. The soybean oil price was forecast 2.5¢ higher at 38.5¢/lb. As with corn, lower estimated production and ending stocks contributed to the increase. 

“The impetus for surging prices (soybeans) has come from adverse crop development conditions in Argentina, the third largest soybean producing country and the leading exporter of soybean meal in the world,” LMIC analysts explain. “Reduced availability of soybeans and soybean products from Argentina is forcing the world to focus on U.S. soybean supplies. Projected exports of U.S. soybeans is expected to be a record at 2.2 billion bu. and soybean meal exports should be close to the record set last year at 14 million tons. As a result, inventories of soybeans at the end of this crop year (Aug. 31, 2021) will be close to 200-220 million bu., down from 909 million bu. two years earlier. 

“Tightening supplies support a rising price trend in order to bid more plantings of the crop in the U.S. this spring versus corn and cotton. The average price for soybeans this crop year is currently expected to be $11.50 but the risks to this forecast are all to the high side, depending on weather and the global economy in coming months. The potential for record high soybean prices in the $15-$20 area exists, based on possible market conditions.”

Fed Cattle Prices Soften

Despite the nascent and slow rebound in wholesale beef values, negotiated cash fed cattle prices struggled last week: generally $1-$3 lower at $108-$111/cwt., according to the Agricultural Marketing Service. Dressed prices were $1-$4 lower at $172-$174.

More specifically, live prices last week were at $112/cwt. in the Southern Plains and Colorado, $110-$111 in Nebraska and $110 in the western Corn Belt. Dressed trade was at $172 in Nebraska and at $173-$174 in the western Corn Belt.

Through Thursday, the average five-area direct fed steer price was $109.52/cwt. on a live basis, which was $1.96 less than the previous week and $14.48 less than the same week a year earlier. The average steer price in the beef was $173.06, which was $2.96 less than the previous week and $26.01 less than a year earlier.

Week to week on Friday, except for an average of $1.40 lower in the front two contracts, Live Cattle futures closed an average of $2.33 higher.

Choice boxed beef cutout value was $6.12 higher at $212.92/cwt. week to week on Friday. Select was $6.36 higher at $203.08.

Griffith notes the rib and loin primal are driving the stronger beef market with both more than $11/cwt. higher week to week.

“The chuck and short plate are also providing some support for the higher price as the chuck is nearly $7 higher than last week and short plate values have increased more than $5,” Griffith says.

Looking further ahead, USDA lowered its 2021 forecast for total red meat and poultry production, compared to the previous month’s estimate, in the latest WASDE.

Even so, total estimated red meat and poultry production for 2021 is forecast 634 million lbs. more than in 2020 (+0.60%) at 107.10 billion lbs.

Beef production for 2021 is forecast at 27.19 billion lbs., which would be 32 million lbs. more (+0.11%) than in 2020, with higher non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights.

WASDE estimated the average five-area direct fed steer price for last year at $108.51/cwt. Fed steer prices for 2021 are projected to be $113 in the first and second quarters, $115 in the third quarter and $120 in the fourth quarter for an annual average of $115.50, which was 50¢ more than the previous month’s forecast.

Friday to Friday Change

Weekly Auction Receipts

Most recent week available.

Jan. 9 Auction Direct

Video/net

Total
 

349,800

(+112,600)

40,300

(-1,700)

87,300

(+60,600)

477,400

(+171,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 15 Change
  $135.45 –   0.18

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Most recent week available.

North Central

Steers-Cash Jan. 8 Change
600-700 lbs. $151.54 +  $4.76
700-800 lbs. $141.00 +  $4.19
800-900 lbs. $134.78 +  $2.30

South Central

Steers-Cash Jan. 8 Change
500-600 lbs. $157.32 + $0.06
600-700 lbs. $142.31 –  $2.48
700-800 lbs. $134.55 –  $3.08

Southeast

Steers-Cash Jan. 8 Change
400-500 lbs. $151.95 –  $1.38
500-600 lbs. $142.66 + $1.94
600-700 lbs. $131.91 + $2.96

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 15 ($/cwt) Change
Choice $212.92 + $6.12
Select $203.08 + $6.36
Ch-Se Spread $9.84 –  $0.27

 

Futures

Feeder Cattle  Jan. 15 Change
Jan  $134.575 –  $1.250
Mar $135.825 –  $1.000
Apr $138.300 –  $0.775
May $140.250 –  $0.375
Aug $147.500 –  $0.200
Sep $149.350 + $0.850
Oct  $150.250 + $1.225
Nov $150.475 + $1.725

 

Live Cattle   Jan. 15 Change
Feb $112.775 –  $1.700
Apr $118.200 –  $1.100
Jun $116.275 + $1.000
Aug $117.025 + $2.200
Oct $120.825 + $2.400
Dec $123.475 + $2.775
Feb ’22 $124.750 + $2.550
Apr $125.750 + $2.750
Jun $121.375 + $3.625

 

Corn  Jan. 15 Change
Mar ’21 $5.314 + $0.352
May $5.346 + $0.372
Jly $5.320 + $0.374
Sep $4.854 + $0.290
Oct $4.600 + $0.196
Mar ’22 $4.654 + $0.198

 

Oil CME-WTI Jan. 15 Change
Feb $52.36 + $0.12
Mar $52.42 + $0.16
Apr $52.36 + $0.17
May $52.23 + $0.19
Jun $52.04 + $0.22
Jly $51.82 + $0.28

 

Equities

Equity Indexes Jan. 15 Change
Dow Industrial Average  30814.26 –    283.71
NASDAQ  12998.50 –    204.37
S&P 500   3768.25 –      56.43
Dollar (DXY)       90.78 +       0.71
Cattle Current Weekly Highlights—Week ending Jan. 15, 2021 2021-01-17T12:17:51-06:00

Cattle Current Weekly Highlights—Week ending Jan. 8, 2021

Cattle markets were mixed and tenuous last week amid plenty of uncertainty: everything from the potential demand impact of continually rising COVID-19 cases to the relentless rise in feed costs.

Judging by the weekly auction sales monitored by Cattle Current, the turn of the calendar and mostly conducive weather, prompted heavy market volume last week. Where week-to-week trends were available, prices were steady to mixed across a wide range.

“Demand was reported as good throughout the nation the first full marketing week of 2021. The first full week of the year is typically the largest volume week of the year and this year was no exception with a heavy supply of cattle covering the entire weight spectrum,” AMS analysts explain. “Lightweight grazing type calves with many more days left before heading to a feedyard found the best demand as there is a lot more time for them to offer opportunities for profit.”

With the new year, AMS switched to releasing weekly calf and feeder cattle market summary data from Friday of each week to Monday, in order to have a more comprehensive weekly snapshot.

“Regardless of the physical marketings, most years start with optimism, but that has not been reflected in the Feeder Cattle futures market the first week of the year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “In actuality, Feeder Cattle futures began to slip following the Christmas holiday and that slide continued into the first week of 2021.”

That has plenty to do with surging grain prices, tied to tighter global supplies, dry conditions in South America, speculation about a La Niña drought in North America this spring and strong export demand, supported by the weak U.S. dollar.

Week to week on Friday, compared to the previous Thursday, Corn futures closed an average of 14¢ higher through the front three contracts; an average of 49¢ higher in those contracts over the last two weeks. 

Soybean futures closed an average of 60¢ higher through the front six contracts. That’s an average of about $1 higher for those contracts over the last two weeks.

Week to week, Feeder Cattle futures closed an average of $2.19 lower (35¢ to $3.40 lower) except for an average of 75¢ higher in the back two contracts. 

“January Feeder Cattle futures prices have declined about $5/cwt. since Christmas with most of the other contract months following its lead,” Griffith says. “This decline definitely put a damper on local cattle prices this week. Those that will be impacted the most are producers who waited until the new year to market cattle…As of right now, there appears to be more pressure on the cattle market than information to support higher prices, but odder things have happened. Prices in 2021 are expected to exceed prices in 2020 for most classes of cattle.”

“Cattle production will be affected by higher feed prices, not so much in terms of how much production will occur, but more in terms of how production will change,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments. “For example, higher ration costs will change feedlot demand for the type and size of feeder cattle preferred in feedlots.”

Fed Cattle Prices Steady to Higher

Despite early hopes and fundamentals suggesting higher negotiated cash fed cattle prices, they ended the week generally unevenly steady.

Live prices were steady in the Southern Plains at $112/cwt., steady to $1 lower in Nebraska at $110-$111, steady to $1 higher in Colorado at $112 and steady to $2 lower in the western Corn Belt at $110. Dressed prices were steady to $1 higher at $176 in Nebraska and at $175-$177 in the western Corn Belt, according to AMS.

Through Thursday, the average five-area direct fed steer price was 1¢higher on a live basis at $111.49/cwt. The average steer price in the beef was 47¢ higher at $176.02.

Estimated cattle slaughter of 651,000 head for the week ending Jan. 9 was 136,000 head more than the previous holiday week. Estimated beef production of 544.9 million lbs. was 15.4 million lbs. more (+2.9%) than the same week a year earlier.

Week to week on Friday, compared to the previous Thursday, Live Cattle futures closed an average of 50¢ higher except for 55¢ lower in spot Feb and $5.57 lower in recently minted away-Jun. 

“Given that prices held steady in the South and were $1 higher in the North bodes well for an increasing market. The key to a strengthening market is probably in beef consumers’ hands,” Griffith says.

“Choice Boxed-beef values continue to see some erosion, trading near their lows as January is not noted as a consumer beef month, with loins and ribs down considerably since the holidays,” say AMS analysts.

Choice boxed beef cutout value was $3.15 lower at $206.80/cwt. week to week on Friday, compared to the previous Thursday. Select was $1.04 higher at $196.69.

The average dressed steer weight the week ending Dec. 25 was 913 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 8 lbs. less than the previous week but 8 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 839 lbs. was 8 lbs. less than the previous week but 2 lbs. heavier than the prior year.

“Strong beef demand and tightening cattle supplies provide cautious optimism for cattle markets in 2021,” Peel says. “Higher feed prices and continuing drought conditions are threats to individual producers and perhaps to overall market conditions in the coming year. Consumer demand will be supported by additional federal stimulus for a time but continuing macroeconomic challenges will persist through the year. The continuing pandemic and the time needed for vaccine implementation suggest that much of the promise of 2021 may be pushed into the second half of the year. In the meantime, uncertainty and volatility are likely to remain elevated and risk management continues to be a key management and marketing consideration.”

Friday to Friday Change

Weekly Auction Receipts

Compared to Dec. 18, the most recent previous week available…

Jan. 9 Auction Direct

Video/net

Total
 

349,800

(+112,600)

40,300

(-1,700)

87,300

(+60,600)

477,400

(+171,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 7 Change
  $135.63 –   3.14

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 8 Change
600-700 lbs. $151.54 +  $4.76
700-800 lbs. $141.00 +  $4.19
800-900 lbs. $134.78 +  $2.30

South Central

Steers-Cash Jan. 8 Change
500-600 lbs. $157.32 + $0.06
600-700 lbs. $142.31 –  $2.48
700-800 lbs. $134.55 –  $3.08

Southeast

Steers-Cash Jan. 8 Change
400-500 lbs. $151.95 –  $1.38
500-600 lbs. $142.66 + $1.94
600-700 lbs. $131.91 + $2.96

*most recent previous week available.

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Prior Thursday through Friday…

Boxed Beef  (p.m.) Jan. 8 ($/cwt) Change
Choice $206.80 –  $3.15
Select $196.69 + $1.04
Ch-Se Spread $10.11 –  $4.19

 

Futures

Prior Thursday through Friday…

Feeder Cattle  Jan. 8 Change
Jan  $135.825 –  $3.125
Mar $136.825 –  $3.400
Apr $139.075 –  $2.700
May $140.625 –  $2.225
Aug $147.700 –  $1.325
Sep $148.500 –  $0.350
Oct  $149.025 + $0.750
Nov $148.750 + $0.750

 

Prior Thursday through Friday…

Live Cattle   Jan. 8 Change
Feb $114.475 –  $0.550
Apr $119.300 + $0.050
Jun $115.275 + $0.575
Aug $114.825 + $0.400
Oct $118.425 + $0.825
Dec $120.700 + $0.650
Feb ’22 $122.200 + $0.525
Apr $123.000 + $0.500
Jun $117.750 –  $5.575

 

Prior Thursday through Friday…

Corn  Jan. 8 Change
Mar ’21 $4.962 + $0.122
May $4.974 + $0.142
Jly $4.946 + $0144
Sep $4.564 + $0.100
Oct $4.404 + $0.058
Mar ’22 $4.456 + $0.054

 

Prior Thursday through Friday…

Oil CME-WTI Jan. 8 Change
Feb $52.24 + $3.72
Mar $52.26 + $3.63
Apr $52.19 + $3.50
May $52.04 + $3.35
Jun $51.82 + $3.19
Jly $51.54 + $3.02

 

Equities

Prior Thursday through Friday…

Equity Indexes Jan. 8 Change
Dow Industrial Average  31097.97 +  491.49
NASDAQ  13201.97 +   313.69
S&P 500   3824.68 +     68.61
Dollar (DXY)       90.07 +       0.13
Cattle Current Weekly Highlights—Week ending Jan. 8, 2021 2021-01-16T14:42:10-06:00

Cattle Current Weekly Highlights—Week ending Dec. 31, 2020

Editor’s note: Due to the holiday, there was no weekly regional price or summary auction data from the Agricultural Marketing Service last week. Come January, AMS will begin releasing weekly data on Monday rather than Friday. Cattle Current will adjust accordingly.

Except for the relentless surge in grain futures prices, cattle markets ended mainly steady to higher last week. That’s keeping in mind that the second consecutive holiday-shortened week made for tenuous trends.

Negotiated cash fed cattle prices for the week were generally steady to mostly $2 higher on a live basis through Thursday afternoon, according to the Agricultural Marketing Service: $112/cwt. in the Southern Plains, mostly $112 in Nebraska, mostly $111 with a few up to $112 in Colorado. They were steady to $6 higher week to week in the western Corn Belt at $110-$112. Dressed trade was $3-$4 higher at $175-$176.

From the previous Wednesday through Thursday last week, Live Cattle futures closed an average of 68¢ higher, supported by stronger fundamentals heading into 2021.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University expects beef cow numbers at the beginning of 2021 to range from unchanged to 1% less year over year. If so, he explains it would continue the slow tightening of beef cattle numbers and beef production in 2021.

“Total 2021 cattle slaughter is forecast to be down about 1%, leading to a year-over-year decrease in beef production of 1% to 2%,” Peel says, in his weekly market comments. “Herd dynamics in 2021 could affect these forecasts. If herd liquidation should accelerate, the short-term impacts would be an increase in cattle slaughter due to more heifers and cows in the slaughter totals. Conversely, should the industry move to expand cattle inventories, cattle slaughter would be reduced with fewer heifers in feedlots and fewer cows culled. There is potential for either scenario. The cattle inventory trajectory in 2021 will depend on numerous factors including control of the pandemic, U.S. macroeconomic conditions, global protein markets, drought conditions, and feed prices, among others.”

More immediately, wholesale beef values continued to suggest the seasonal bottom was established.  

Choice boxed beef cutout value was $2.41 higher on Thursday, compared to the previous Wednesday at $209.95/cwt. Select was $2.28 lower at $195.65.

Grain Prices Surge Higher

Calf and feeder cattle trade was sparse again last week; no trends reported by AMS through Thursday afternoon.

From the previous Wednesday through Thursday last week, Feeder Cattle futures closed an average of $1.85 lower, pressured by climbing grain futures, tied to iffy international production and strong exports.  

From the previous Wednesday through Thursday last week, Corn futures closed an average of 35¢ higher through the front three contracts; an average of 14¢ higher through the next three.  

During the same period, Soybean futures closed an average of 45¢ higher through the front six contracts.

Friday to Friday Change

Weekly Auction Receipts

Two weeks earlier…

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

CME Feeder Index

Wednesday through Wednesday…

CME Feeder Index* Dec. 30 Change
  $138.77 –   1.05

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Two weeks earlier…

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

Two weeks earlier…

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

Two weeks earlier…

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Wednesday through Thursday…

Boxed Beef  (p.m.) Dec. 31 ($/cwt) Change
Choice $209.95 + $2.41
Select $195.65 –  $2.28
Ch-Se Spread $14.30 + $4.68

 

Futures

Wednesday through Thursday…

Feeder Cattle  Dec. 31 Change
Jan ’21 $138.950 –  $1.325
Mar $140.225 –  $1.725
Apr $141.775 –  $1.975
May $142.850 –  $2.375
Aug $149.025 –  $1.975
Sep $148.850 –  $1.600
Oct ’21 $148.275 –  $1.725
Nov $148.000 –  $2.100

 

Wednesday through Thursday…

Live Cattle   Dec. 31 Change
Dec $112.950 + $1.025
Feb ’21 $115.025 + $0.300
Apr $119.250 + $0.550
Jun $114.700 + $0.400
Aug $114.425 + $0.700
Oct $117.600 + $0.850
Dec $120.050 + $0.750
Feb ’22 $121.675 + $0.925
Apr $122.500 + $0.625

 

Wednesday through Thursday…

Corn  Dec. 31 Change
Mar ’21 $4.840 + $0.368
May $4.832 + $0.350
Jly $4.802 + $0.326
Sep $4.464 + $0.178
Oct $4.346 + $0.114
Mar ’22 $4.402 + $0.128

 

Wednesday through Thursday…

Oil CME-WTI Dec. 31 Change
Feb $48.52 + $0.40
Mar $48.63 + $0.39
Apr $48.69 + $0.36
May $48.69 + $0.32
Jun $48.63 + $0.29
Jly $48.52 + $0.26

 

Equities

Wednesday through Thursday…

Equity Indexes Dec. 31 Change
Dow Industrial Average  30606.48 +  476.65
NASDAQ  12888.28 +   117.17
S&P 500   3756.07 +     66.06
Dollar (DXY)       89.92 –        0.40
Cattle Current Weekly Highlights—Week ending Dec. 31, 2020 2021-01-01T15:38:43-06:00

Cattle Current Weekly Highlights—Week ending Dec. 25, 2020

Editor’s note: Due to the holiday, there was no weekly regional price or summary auction data from the Agricultural Marketing Service last week. Come January, AMS will begin releasing weekly data on Monday rather than Friday. Cattle Current will adjust accordingly.

Given the Christmas holiday, calf and feeder cattle trade was sparse last week, so there were no trends. A week earlier, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS).

“Prices for calves should begin to gain traction moving into the first quarter of 2021. There is also optimism for the yearling cattle market in 2021,” said Andrew P. Griffith, agricultural economist at the University of Tennessee, in his Dec. 18 weekly market comments.

Feeder Cattle futures closed an average of 46¢ higher week to week on Thursday (previous Friday through Thursday), except for 10¢ lower in Aug. That was in the face of continued strengthening in grain prices.

For instance, Corn futures closed an average of 9¢ higher week to week on Thursday (previous Friday through Thursday) through the front six contracts. Soybean futures closed an average of 42¢ higher.

Fed Cattle Prices Strengthen

Expectations for firmer to higher wholesale beef values helped underpin market support last week.

Choice boxed beef cutout value was $1.09 lower on Wednesday; compared to the previous Friday at $207.54/cwt. Select was $3.66 higher at $197.93.

Negotiated cash fed cattle was not reported Thursday or Friday. On Wednesday, prices were $2 higher in the Southern Plains at $110/cwt., according to the Agricultural Marketing Service. There were some early dressed sales in Nebraska and the western Corn Belt at $172; a few live sales in the western Corn Belt at $110. Trade in those regions the previous week was at mostly $105 on a live basis and mostly $165 in the beef.

Live Cattle futures closed an average of 71¢ higher week to week on Thursday (previous Friday through Thursday), from 12¢ higher to $1.67 higher in spot Dec.

Higher aforementioned feed costs lowered projected feedlot returns for the majority of the next nine months, in the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU).

Keep in mind that the following projections assume no price risk management.

From December through August of next year, KSU projected positive returns, ranging from an estimated +$14.99 per head in December to +$91.11 in May, with estimated feedlot cost of gain (FCOG) ranging from $84.67/cwt. (Dec.) to $91.11 in May.

Conversely, KSU projects losses in five of those nine months, ranging from -$6.28 per head in August to -$47.92 in July, with FCOG in those months ranging from $86.14/cwt. in January to $92.38 in April.

At the same time, feedlot flows should stabilize going forward, compared to the volatility spawned by pandemic disruptions seen for much of the year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

For instance, in his weekly market comments, Peel explained, “Monthly feedlot placements varied from 23% lower year over year in March to 11% higher in July, to 11% lower in October.” For January through November, he says total placements were 4.4% less year over year, but were 0.5% more than last year for the last six months.

“Placements below a year ago in October and November helped greatly reduce inventories on feed. October placements were down by more than 10%, and November settled in at 9% below 2019,” say analysts with the Livestock Marketing Information Center (LMIC), reflecting on last week’s monthly Cattle on Feed report.

“From a placement perspective, December auction volumes of feeder cattle receipts appear to have increased from December of last year, but border crossings of feeder cattle from Mexico continue to be below a year ago,” LMIC analysts explain, in the latest Livestock Monitor. “The five-year average indicates December placements drop about 15% from November levels. Given November’s already low placements, expect December 2020 placements to have a restrained seasonal move compared to the five-year average.”

“With herd inventories continuing to drift lower, total cattle numbers should be generally supportive of cattle prices in 2021,” Peel says.

Friday to Friday Change

Weekly Auction Receipts

Prior week…

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

CME Feeder Index

Thursday through Wednesday…

CME Feeder Index* Dec. 23 Change
  $139.82 +  $0.26

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Prior week…

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

 

Prior week…

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

 

Prior week…

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Friday through Wednesday…

Boxed Beef  (p.m.) Dec. 23 ($/cwt) Change
Choice $207.54 –  $1.09
Select $197.93 + $3.66
Ch-Se Spread $9.62 –  $4.74

 

Futures

Friday through Thursday…

Feeder Cattle  Dec. 24 Change
Jan ’21 $140.925 + $0.475
Mar $142.325 + $0.025
Apr $143.925 + $0.025
May $145.225 + $0.450
Aug $150.000 –  $0.100
Sep $150.475 + $0.575
Oct ’21 $150.025 + $0.475
Nov $149.700 + $1.200

 

Friday through Thursday…

Live Cattle   Dec. 24 Change
Dec $112.150 + $1.675
Feb ’21 $114.975 + $0.125
Apr $118.975 + $0.325
Jun $114.475 + $0.400
Aug $113.925 + $0.450
Oct $116.975 + $0.700
Dec $119.475 + $0.925
Feb ’22 $120.925 + $0.825
Apr $121.800 + $0.925

 

Friday through Thursday…

Corn  Dec. 24 Change
Mar ’21 $4.510 + $0.136
May $4.516 + $0.124
Jly $4.502 + $0.106
Sep $4.300 + $0.070
Oct $4.244 + $0.060
Mar ’22 $4.286 + $0.052

 

Friday through Thursday…

Oil CME-WTI Dec. 24 Change
Feb $48.23 –  $1.01
Mar $48.35 –  $0.99
Apr $48.43 –  $0.97
May $48.45 –  $0.95
Jun $48.43 –  $0.90
Jly $48.34 –  $0.87

 

Equities

Friday through Thursday…

Equity Indexes Dec. 24 Change
Dow Industrial Average  30199.87 +  20.82
NASDAQ  12804.73 +  49.09
S&P 500   3703.06 –      6.35
Dollar (DXY)       90.22 +     0.20
Cattle Current Weekly Highlights—Week ending Dec. 25, 2020 2020-12-27T14:58:51-06:00

Cattle Current Weekly Highlights—Week ending Dec. 18, 2020

Warily higher Cattle futures prices, the prospect for stronger fundamentals next year and last-minute marketing for the season lent support to calf and feeder cattle prices last week.

Nationwide, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS). However, the late-week storm pressured buyer demand in some areas.

“A strong winter storm bringing as much as 11 plus inches of snow to Oklahoma and the East coast has many—mostly wheat producers—weary of health issues,” explained the AMS reporter at Thursday’s Superior Livestock Video Auction. “Demand was moderate to good for feeder cattle; mostly light to moderate for calves as producers in wheat country are currently turning cattle out or looking to do so if health issues are in check.”

Feeder Cattle futures closed an average of $1.76 higher week to week on Friday, from 72¢ higher in spot Jan to $2.35 higher.

“Calf and feeder cattle prices are definitely not at their peak right now, but they also are not terrible. Prices for calves should begin to gain traction moving into the first quarter of 2021. There is also optimism for the yearling cattle market in 2021,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

In the meantime, analysts with USDA’s Economic Research Service (ERS) point out feeder steer prices (750-800 lbs.) in November were $8 less year over year at $138.22/cwt.

“The first prices reported in December were almost $13 below the same week last year at $136.67,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook.

Even so, ERS left the projected fourth-quarter feeder steer price unchanged at $137. Forecast prices (basis Oklahoma City) for next year were also unchanged: $133 in the first quarter, $136 in the second quarter, $141 in the third quarter and $138 for the annual average.

Iffy weather in other parts of  the world, the grain port strike in Argentina, the lower U.S. dollar and strong exports continue to support grain prices.

U.S. net corn export sales for the week ending Dec. 10 were 41% more than the previous week (2020-21 market year) and 40% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report.

Week to week on Friday, Corn futures closed an average of 10¢ higher through the front six contracts. 

Net U.S. soybean export sales were 62% more than the previous week and 20% more than the prior four-week average.

Week to week on Friday, Soybean futures closed an average of 51¢ higher through the front six contracts.

Feedlot Placements Down Near 9%

Markets will likely view Friday’s monthly Cattle on Feed report as at least neutral, with slightly fewer November placements and slightly more marketings than expected.

Placements in November of 1.91 million head were 187,000 head fewer (-8.9%) than the prior year, compared to average expectations of 8.2% less, according to the Urner Barry Survey shared by the Daily Livestock Report.

Marketings in November of 1.78 million head were 31,000 head fewer (-1.7%); pre-report expectations were for a decline of 2.1%.

Total cattle on feed in yards with 1,000 or more capacity, as of Dec. 1, were 12.04 million head, just 5,000 head more (+0.04%) than the previous year. Expectations ahead of the report were for no change.

Fed Cattle Prices Waver

Negotiated cash fed cattle prices ended steady in the Southern Plains last week at $108/cwt., but lower in the North. Live prices were $1-$2 lower in Nebraska at $105 and $1 lower in the western Corn Belt at $105. Dressed trade was $3 lower at $165.

Live Cattle futures closed an average of $1.28 higher week to week on Friday, from 85¢ to $1.72 higher in spot Dec. 

Although it appears the backlog of fed cattle created by pandemic disruptions is past, mostly mild weather until recently continues to buoy feedlot cattle performance.

The average dressed steer weight the week ending Dec. 5 was 922 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week and 16 lbs. heavier than the prior year. The average dressed heifer weight of 850 lbs. was the same as a week earlier but 10 lbs. heavier than the previous year.

ERS projected the average fourth-quarter, five-area direct fed steer price $1 lower at $108. However, they forecast next year’s average price $1 higher at $115.

Specifically, fed steer prices are forecast to be $113 in the first and second quarters and $114 in the third quarter.

Wholesale beef values continued their seasonal slide last week but showed signs of nearing the bottom. Choice boxed beef cutout value was $5.25 lower week to week on Friday at $208.63/cwt. Select was $1.44 lower at $194.27.

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

 

CME Feeder Index

CME Feeder Index* Dec. 17 Change
  $138.48 +  $1.82

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

 

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

 

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 18 ($/cwt) Change
Choice $208.63 –  $5.25
Select $194.27 –  $1.44
Ch-Se Spread $14.36 –  $3.81

 

Futures

Feeder Cattle  Dec. 18 Change
Jan ’21 $140.450 + $0.725
Mar $142.300 + $1.750
Apr $143.900 + $2.000
May $144.775 + $2.350
Aug $150.100 + $2.275
Sep $149.900 + $1.950
Oct ’21 $149.550 + $1.825
Nov $148.500 + $1.200

 

Live Cattle   Dec. 18 Change
Dec $110.475 + $1.725
Feb ’21 $114.850 + $1.600
Apr $118.650 + $1.275
Jun $114.075 + $1.475
Aug $113.475 + $1.500
Oct $116.275 + $1.075
Dec $118.500 + $0.850
Feb ’22 $120.100 + $0.975
Apr $120.875 + $1.050

 

Corn  Dec. 18 Change
Mar ’21 $4.374 + $0.140
May $4.392 + $0.128
Jly $4.396 + $0.114
Sep $4.230 + $0.090
Oct $4.184 + $0.062
Mar ’22 $4.234 + $0.058

 

Oil CME-WTI Dec. 18 Change
Jan ’21 $49.10 + $2.53
Feb $49.24 + $2.49
Mar $49.34 + $2.47
Apr $49.40 + $2.44
May $49.40 + $2.40
Jun $49.33 + $2.36

Equities

Equity Indexes Dec. 18 Change
Dow Industrial Average  30179.05 +  132.68
NASDAQ  12755.64 +  377.77
S&P 500   3709.41 +    46.18
Dollar (DXY)       89.92 –       1.06
Cattle Current Weekly Highlights—Week ending Dec. 18, 2020 2020-12-20T12:12:49-06:00

Cattle Current Weekly Highlights—Week ending Dec. 11, 2020

Calves and feeder cattle sold from $5/cwt. lower to $5 higher, according to the Agricultural Marketing Service (AMS). Auction receipts were heavy as some markets hosted their last sales before the holidays, which caused some truck shortages.

AMS analysts say the strongest demand was for lighter-weight calves (300-450 lbs.) suitable for summer grazing, as well as heavy yearlings that fit the April board.

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee says, “There is no doubt the strongest demand (Tennessee) has continued to be for weaned and vaccinated calves as was evident by the $11/cwt. premium for 525-lb. calves. The expectation is that the run of calves will slow through the end of the year with the holiday season knocking on the door, but favorable weather conditions could result in some producers continuing to set wheels under their calf crop. The slightly stronger calf prices the past couple of weeks are largely due to higher Feeder Cattle futures prices.”

Feeder Cattle futures closed an average of $1.06 higher week to week on Friday, except for 5¢ lower in spot Jan.

“Most Feeder Cattle futures contract prices have displayed considerable strength the past two weeks and are trading at the upper end of the recent trading range. This does not mean they have traded to the contract high, but there is reason to believe Feeder Cattle futures will, at a minimum, hold their ground for a little while and maybe even move higher,” Griffith says.

At the same time, grain futures continue to find support from lower estimated ending stocks in the U.S., as well as uncertainty about crop weather in South America.

USDA’s Economic Research Service (ERS) left the season-average corn price for 2020-21 unchanged at $4/bu., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). They increased the season average soybean price 15¢ to $10.55 bu. Projected wheat price was unchanged at $4.70/bu.

Fed Cattle Prices Softer

Last week, negotiated cash fed cattle prices were generally $2 lower on a live basis in the Southern Plains at $108/cwt., and $4-$5 lower in the western Corn Belt at $104-$105. Dressed trade was $4 lower in the western Corn Belt at $168. The previous week, prices in Nebraska were at $110 on a live basis and at $172-$174 in the beef.

Estimated total cattle slaughter last week of 665,000 head was 2,000 head fewer than the previous week and 11,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 30.63 million head is 1.07 million less (-3.38%) than a year earlier.

Live Cattle futures closed an average of 91¢ higher week to week on Friday (45¢ to $1.55 higher) except for 12¢ lower in spot Dec.

“Futures traders make trades based on many different sets of information, and a coronavirus vaccine may be one of them. However, it is not known how consumers will react when a vaccine is available to the general public, nor will the change affect long-term beef and cattle prices,” Griffith says.

He’s referring to Friday’s announcement thatthe U.S. Food and Drug Administration (FDA) issued emergency use authorization for a vaccine for the prevention of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in individuals 16 years of age and older. The emergency use authorization allows the Pfizer-BioNTech COVID-19 Vaccine to be distributed in the U.S.

WASDE projected the annual average five-area direct steer price for next year $1 higher than the previous month at $115/cwt. That would be $6.54 more than this year’s estimated average of $108.46. For next year, prices are forecast at $113 in the first and second quarters; $114 in the third.

Beef Values Keep Sinking

Wholesale beef values declined significantly last week as holiday buying appeared to be complete.

Choice boxed beef cutout value was $21.14 lower week to week on Friday at $213.88/cwt. Select was $21.80 lower at $195.71.

“The large week-over-week price decline is a good indicator that retailers and restaurants have met their immediate needs as it relates to beef purchases. There is sure to be some late-year purchases to restock meat counters following the run consumers will make at grocery stores the next couple of weeks, but the process of restocking is unlikely to make boxed beef prices shoot higher,” Griffith explains.

Moreover, Griffith says it’s likely cutout prices will continue to decline, Choice more than Select, as consumer demand in the winter typically shifts seasonally away from middle meats and toward end meats.

Overall, Griffith says, “Beef demand has remained strong throughout the pandemic, and reopening of restaurants and food service will most likely send the market back to pre-coronavirus tendencies.”

Estimated beef production for last week of 559 million lbs. is 800,000 less than the previous week. Estimated year-to-date beef production of 25.46 billion lbs. is 227 million lbs. less (-0.88 %) than the same time last year.

The average dressed steer weight the week ending Nov. 28 was 921 lbs., which was 2 lbs. lighter than the previous week but 10 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 850 lbs., which was 3 lbs. heavier than the prior week and 10 lbs. heavier than the prior year.

The WASDE forecasts U.S. beef production for next year at 27.26 billion lbs., which was 105 million lbs. less than the previous month’s projection, on lower expected fed and non-fed cattle slaughter in the first half of 2021. If realized, beef production next year would be just 22 million lbs. more than this year.

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 11 Auction Direct

Video/net

Total
 

354,700

(+76,100)

27,000

(-7,500)

5,500

(-54,500)

387,200

(+14,100)

 

 

CME Feeder Index

CME Feeder Index* Dec. 10 Change
  $136.66 –  $2.52

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.11 Change
600-700 lbs. $150.74 –   $1.63
700-800 lbs. $141.42 –   $2.31
800-900 lbs. $136.69 –   $4.30

 

South Central

Steers-Cash Dec. 11 Change
500-600 lbs. $155.94 + $1.70
600-700 lbs. $141.69 + $0.22
700-800 lbs. $135.67 –  $1.62

 

Southeast

Steers-Cash Dec. 11 Change
400-500 lbs. $154.44 + $0.27
500-600 lbs. $139.60 –  $0.74
600-700 lbs. $128.67 –  $1.55

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 11 ($/cwt) Change
Choice $213.88 –  $21.14
Select $195.71 –  $21.80
Ch-Se Spread $18.17 +   $0.66

 

Futures

Feeder Cattle  Dec. 11 Change
Jan ’21 $139.725 –  $0.050
Mar $140.550 + $1.125
Apr $141.900 + $1.125
May $142.425 + $0.800
Aug $147.825 + $0.975
Sep $147.950 + $1.400
Oct ’21 $147.725 + $1.225
Nov $147.300 + $0.775

 

Live Cattle   Dec. 11 Change
Dec $108.750 –  $0.125
Feb ’21 $113.250 + $0.850
Apr $117.375 + $1.200
Jun $112.600 + $1.550
Aug $111.975 + $1.350
Oct $115.200 + $0.750
Dec $117.650 + $0.475
Feb ’22 $119.125 + $0.450
Apr $119.825 + $0.675

 

Corn  Dec. 11 Change
Dec $4.242 + $0.072
Mar ’21 $4.234 + $0.030
May $4.264 + $0.032
Jly $4.282 + $0.042
Sep $4.140 + $0.036
Oct $4.122 + $0.020

 

Oil CME-WTI Dec. 11 Change
Jan ’21 $46.57 + $0.31
Feb $46.75 + $0.33
Mar $46.87 + $0.33
Apr $46.96 + $0.36
May $47.00 + $0.39
Jun $46.97 + $0.41

Equities

Equity Indexes Dec. 11 Change
Dow Industrial Average  30046.37 –   171.89
NASDAQ  12377.87 –    86.36
S&P 500   3663.46 –    35.66
Dollar (DXY)       90.98 +     0.17
Cattle Current Weekly Highlights—Week ending Dec. 11, 2020 2020-12-13T15:59:50-06:00

Cattle Current Weekly Highlights—Week ending Dec. 4, 2020

Cash and futures cattle prices emerged from the Thanksgiving holiday with mixed signals, tied in part to wonderments about beef demand following the year-end holidays.

Nationwide, calves and feeder cattle sold from $2/cwt. lower to $3 higher, compared to two weeks earlier, according to the Agricultural Marketing Service (AMS).

“Calves suitable for grazing, coming out of the Southeast, showed the most price support,” say AMS analysts. “Yearlings were still in demand, but at a lower price point than before the Thanksgiving Day holiday.” 

Feeder Cattle futures closed an average of 36¢ higher week to week on Friday, except for 5¢ and 7¢ lower at either end of the board. They were helped along by month-end profit taking that left Corn futures an average of 10¢ lower through the front six contracts, week to week on Friday. 

AMS analysts note feedlots are currently penciling cost of gain at around $1/lb. At the same time, they point our spot Live Cattle futures ended the week $11.32 lower year over year; $12.57 lower for Feb.

“The premium on preconditioned cattle will not deteriorate moving forward, but all calf prices will strengthen moving into 2021. The market is expected to heat up in the middle of February and moving through the end of April,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf market naturally leads into the feeder cattle market which is also expected to strengthen in 2021. Recent yearling cattle prices have not been bad, but they have been hampered by the number of cattle on feed and many feedlots being full.”

Fed Cattle Trade Unevenly Steady

For the week, negotiated cash fed cattle prices were $1 lower to $1 higher on a live basis in the Texas Panhandle at $110-$112/cwt. They were $1 lower in Kansas at $110. Live prices were steady to $1 lower in Nebraska at $109-$110 and steady to $1 lower in the western Corn Belt at $109. Dressed trade was steady to $2 lower at $172-$174.

“The hope of hitting $115 before the end of the year is diminishing quickly for finished cattle. They held their ground the past couple of weeks, but they could not find any traction to push higher. It is beginning to get a little late in the year for holiday beef buying to provide a significant boost to the aforementioned price level,” Griffith says. “There will most likely be a surge in beef purchases to restock the meat counter if consumers pull on beef for Christmas and New Year’s, but there is no guarantee it will provide significant support to push cattle prices higher. The expectation at this point, through the end of the year, is for finished cattle prices to trade steady with $1 to $2 swings possible in either direction.”

Live Cattle futures closed an average of 86¢ lower week to week on Friday, from 22¢ lower to $1.75 lower in spot Dec, except for 17¢ to 30¢ higher in the back two contracts.

AMS analysts point out that a year ago last week was the first one that the Tyson plant in Holcombe, KS reopened following the fire that shuttered it the previous August.

Beef Prices Take Seasonal Turn

If last week is any indication, the seasonal surge in wholesale beef values has about run its course.

Choice boxed beef cutout value was $7.83 lower week to week on Friday at $235.02/cwt. Select was $3.17 lower at $217.51.

The average steer carcass weight for the week ending Nov. 21 was 923 lbs., which was 7 lbs. lighter than the previous week but 12 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average heifer carcass weight was 847 lbs., which was 1 lb. heavier than the prior week and 5 lbs. heavier than the previous year.

“What appeared to be happening was some last-minute holiday purchases and some purchases to fulfill consumer demand when January and February arrive,” Griffith explains. “There is a good chance that there will be some good deals on Choice roasts relative to Select roasts moving into the middle of winter. Many folks in the industry have made comments about consumer demand and if it will persist. Given the past eight or nine months, one would have to assume that consumers will continue to demand beef. The relatively strong demand will support beef prices through the winter. Another round of government aid to the general public would also go a long way to promoting beef movement. Such aid simply adds to disposable income.”

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 4 Auction Direct

Video/net

Total
 

278,600

(+166,300)

34,500

(-800)

60,000

(+58,400)

373,100

(+223,900)

 

 

CME Feeder Index

CME Feeder Index* Dec. 3 Change
  $139.18 + $1.62

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.4 Change
600-700 lbs. $152.37 +  $5.26
700-800 lbs. $143.73 +  $2.57
800-900 lbs. $140.99 –   $1.63

 

South Central

Steers-Cash Dec. 4 Change
500-600 lbs. $154.24 + $4.74
600-700 lbs. $141.47 + $0.07
700-800 lbs. $137.29 –  $2.94

 

Southeast

Steers-Cash Dec. 4 Change
400-500 lbs. $154.17 + $7.58
500-600 lbs. $140.34 + $3.50
600-700 lbs. $130.22 + $0.42

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 4 ($/cwt) Change
Choice $235.02 –  $7.83
Select $217.51 –  $3.17
Ch-Se Spread $17.51 –  $4.66

 

Futures

Feeder Cattle  Dec. 4 Change
Jan ’21 $139.775 –  $0.050
Mar $139.425 + $0.425
Apr $140.775 + $0.450
May $141.625 + $0.400
Aug $146.850 + $0.650
Sep $146.550 + $0.100
Oct ’21 $146.500 + $0.150
Nov $146.525 –  $0.075

 

Live Cattle   Dec. 4 Change
Dec $108.875 –  $1.750
Feb ’21 $112.400 –  $0.850
Apr $116.175 –  $0.775
Jun $111.050 –  $0.850
Aug $110.625 –  $0.725
Oct $114.450 –  $0.225
Dec $117.175 + $0.175
Feb ’22 $118.675 + $0.300
Apr $119.150 -0-

 

Corn  Dec. 4 Change
Dec $4.170 –  $0.084
Mar ’21 $4.204 –  $0.132
May $4.232 –  $0.134
Jly $4.240 –  $0.132
Sep $4.104 –  $0.070
Oct $4.102 –  $0.042

 

Oil CME-WTI Dec. 4 Change
Jan ’21 $46.26 + $0.73
Feb $46.42 + $0.68
Mar $46.54 + $0.63
Apr $46.60 + $0.59
May $46.61 + $0.55
Jun $46.56 + $0.49

Equities

Equity Indexes Dec. 4 Change
Dow Industrial Average  30218.26 +  307.89
NASDAQ  12464.23 +  258.38
S&P 500   3699.12 +     60.77
Dollar (DXY)       90.81 –        0.98
Cattle Current Weekly Highlights—Week ending Dec. 4, 2020 2020-12-06T15:28:16-06:00

Cattle Current Weekly Highlights—Week ending Nov. 27, 2020

Cattle futures bounced back last week, gaining back more than was lost the previous week, helped along by higher outside markets.

That started to show up in cash prices paid at late-week sales, keeping in mind receipts were significantly lower due to the holiday.

Feeder Cattle futures closed an average of $3.80 higher week to week on Friday, from $2.77 higher to $5.22 higher in spot Jan.

“Feeder markets are reflecting a mix of influences including seasonal supplies of calves, wheat pasture forage conditions, higher corn prices and volatility in futures markets,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Feeder markets have been very dynamic and it means that both cow-calf and stocker producers must constantly evaluate changing market conditions.”

For instance, Peel pointed to the currently steeper price rollback on calves lighter than 600 lbs. and the impact on value of gain. He gave the example of cow-calf producers selling calves at weaning, explaining recent prices mean the value of adding 50 lbs. to a 500-lb. steer is about 50¢/lb.

“For producers holding calves after weaning, the low value of gain must be balanced against the value of preconditioning programs and extra weaning time before sale,” Peel said. “The implications of current market conditions depend on the current weight of animals and the amount of additional weight added to animals prior to sale.”

Fed Cattle Prices Gain

Seasonal strength in wholesale beef values helped lift fed cattle prices last week.

Choice boxed beef cutout value was $4.50 higher week to week on Friday at $242.85/cwt. Select was $5.70 higher at $220.68.

The average dressed steer weight for the week ending Nov. 14 was 930 lbs., which was 6 lbs. heavier than the previous week and 18 lbs. heavier than the prior year. That’s according to the most recent Actual Slaughter Under Federal Inspection report from USDA. The average dressed heifer weight of 846 lbs. was the same as a week earlier but 5 lbs. heavier than the same week last year.

Negotiated cash fed cattle prices ended the week generally steady to $1 higher on a live basis and $2 higher in the beef, according to the Agricultural Marketing Service.

Live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $174.

Live Cattle futures closed an average of $2.17 higher week to week on Friday, from $1.32 higher toward the back to $2.70 higher.

“This year’s December Live Cattle contract closed at $111.25 on Friday, which was $9.05 lower than last year, while the February contract is $11.37 lower than last year,” explain AMS analysts.

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 27 Auction Direct

Video/net

Total
 

112,300

(-209,600)

35,300

(-10,100)

1,600

(-8,200)

149,200

(-227,900)

 

 

CME Feeder Index

CME Feeder Index* Nov. 25 Change
  $136.90 –  $0.61

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 27 Change
600-700 lbs. $147.11 +  $0.60
700-800 lbs. $141.16 +  $0.01
800-900 lbs. $142.62 –   $0.09

 

South Central

Steers-Cash Nov. 27 Change
500-600 lbs. $149.50 –  $2.15
600-700 lbs. $141.40 + $0.49
700-800 lbs. $140.23 + $3.29

 

Southeast

Steers-Cash Nov. 27 Change
400-500 lbs. $146.59 –  $5.72
500-600 lbs. $136.73 –  $1.28
600-700 lbs. $129.80 + $1.20

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 27 ($/cwt) Change
Choice $242.85 + $4.50
Select $220.68 + $5.70
Ch-Se Spread $22.17 –  $1.20

 

Futures

Feeder Cattle  Nov. 27 Change
Jan ’21 $139.825 + $5.225
Mar $139.000 + $4.625
Apr $140.325 + $4.150
May $141.225 + $3.775
Aug $146.200 + $2.775
Sep $146.450 + $3.200
Oct ’21 $146.350 + $3.150
Nov $146.600 + $3.475

 

Live Cattle   Nov. 27 Change
Dec $110.625 + $2.525
Feb ’21 $113.250 + $2.600
Apr $116.950 + $2.500
Jun $111.900 + $2.650
Aug $111.350 + $2.700
Oct $114.675 + $2.025
Dec $117.000 + $1.875
Feb ’22 $118.375 + $1.325
Apr $119.150 + $1.350

 

Corn  Nov. 27 Change
Dec $4.254 + $0.022
Mar ’21 $4.336 + $0.054
May $4.366 + $0.060
Jly $4.372 + $0.066
Sep $4.174 + $0.068
Oct $4.144 + $0.062

 

Oil CME-WTI Nov. 27 Change
Dec $45.53 + $3.11
Jan ’21 $45.74 + $3.10
Feb $45.91 + $3.07
Mar $46.01 + $2.99
Apr $46.06 + $2.91
May $46.07 + $2.80

 

Equities

Equity Indexes Nov. 27 Change
Dow Industrial Average  29910.37 +  646.89
NASDAQ  12205.85 +  350.88
S&P 500   3638.35 +     80.81
Dollar (DXY)       91.78 –         0.61
Cattle Current Weekly Highlights—Week ending Nov. 27, 2020 2020-11-29T11:47:18-06:00

Cattle Current Weekly Highlights—Week ending Nov. 20, 2020

Doggedly higher grain prices, languishing cash fed cattle prices and increasing demand uncertainty added bearishness to cattle markets as last week progressed.

Calves and yearlings sold steady to $3/cwt. higher early in the week and steady to $4 lower later on, according to the Agricultural Marketing Service.

“With the higher grain prices and forage prices, we will see persistent pressure on feeder cattle and calf prices into 2021,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “One dollar higher corn costs translate into about $6-$7/cwt. lower feeder cattle prices. This cattle price impact is being exacerbated by dry conditions in the western U.S. and hay prices that are creeping higher. The impact on calf prices will be greater.”

Koontz points out Corn futures (2020-21 crop) are about $1 higher than in August and Soybean futures are about $2 higher, including deferred contracts. He adds that prices for both appear to be at a premium to what underlying fundamentals suggest.

Feeder Cattle futures closed an average of $2.21 lower week to week on Friday, from $1.67 lower at the back to $3.27 lower in spot Jan.

USDA’s Economic Research Service (ERS) lowered the expected fourth-quarter feeder steer price by $6 from the previous month to $137/cwt., in the latest Livestock, Dairy and Poultry Outlook (LDPO). That’s basis Oklahoma City for Medium #1. The lower revision is based on seasonal price weakness and cash prices in October down more than $9 year over year at $137.55. ERS reduced expected feeder steer prices for next year by $1, based on higher projected feed prices.

Specifically, ERS forecasts feeder steer prices next year at $133 in the first quarter, $136 in the second, $141 in the third; annual average price of $138.

Feedlot Placements Down 11%

Heading into the new week, markets will likely view Friday’s monthly Cattle on Feed report as neutral, if not a touch friendly.

October placements of 2.19 million head in feedlots with 1,000 head or more capacity were 10.97% less than a year earlier. Estimates ahead of the report suggested placements to be about 1.5% more.

Marketings of 1.87 million head in October were just 2,000 fewer than a year earlier, about in line with pre-report estimates.

Cattle on feed Nov. 1 numbered 11.97 million head, which was 1.33% more than a year earlier. That was slightly less than expectations, but the most for the month since the data series began in 1996.

Fed Cattle Prices Steady

Negotiated cash fed cattle prices ended last week steady, according to data from the Agricultural Marketing Service (AMS). Live prices were at $110/cwt. in the Southern Plains and Nebraska and at $109-$110 in the western Corn Belt. Dressed prices are steady at $172.

Live Cattle futures closed an average of $1.50 lower week to week on Friday, from 95¢ to $2.00 lower.

“Heavy cattle continue to put pressure on some regional markets, but it is becoming less and less of a concern with each passing week. Prices may be a little softer next week with the shortened kill week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—decreased for the third consecutive month as a percentage and in volume,” say ERS analysts, in the LDPO. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last three months and above the five-year average. The quickening slaughter pace, combined with an ample supply of fed cattle at heavier weights, led to higher expected beef production in fourth-quarter 2020 relative to 2019. Nevertheless, tighter front-end supplies will likely support continued seasonal movement in fed steer prices.”

ERS left the expected five-area direct fed steer price unchanged for the fourth quarter ($109) and for next year: $113 in the first quarter, $110 in the second quarter, $114 in the third quarter; annual average price of $114.

Boxed Beef Prices Continue Higher

Choice boxed beef cutout value was $12.37 higher week to week on Friday at $238.35/cwt. Select was $5.52 higher at $214.98. That’s $24.03 higher for Choice over the past two weeks and $16.49 higher for Select.

“Sharp upticks in Daily Boxed Beef prices this week caught many observers off-guard with Rib meats leading the charge,” say AMS analysts. “Wholesalers and retailers continued to buy beef out front to cover their customers’ needs moving towards the Christmas holiday season.”

By most measures, domestic consumer beef demand remains resilient in the face of multifold pandemic challenges, but those challenges will likely increase heading into winter.

“Loss of outdoor dining in cold weather will further aggravate restaurant challenges.  Food service demand is likely to be additionally affected with worsening public health challenges. Macroeconomic concerns will grow as consumers go forward with less unemployment support,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Ample supplies of beef, pork and poultry increase market price pressure, though disruptions in supply are a threat as well.”  

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 20 Auction Direct

Video/net

Total
 

321,900

(+16,600)

45,400

(-29,700)

9,800

(-600)

377,100

(-13,700)

 

 

CME Feeder Index

CME Feeder Index* Nov. 19 Change
  $136.75 –  $0.60

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 20 Change
600-700 lbs. $146.51 –   $3.07
700-800 lbs. $141.15 –   $0.38
800-900 lbs. $142.71 +  $0.69

 

South Central

Steers-Cash Nov. 20 Change
500-600 lbs. $151.65 –  $0.22
600-700 lbs. $140.91 + $0.06
700-800 lbs. $136.94 –  $2.75

 

Southeast

Steers-Cash Nov. 20 Change
400-500 lbs. $152.31 + $0.64
500-600 lbs. $140.91 + $2.38
600-700 lbs. $128.60 –  $0.58

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 20 ($/cwt) Change
Choice $238.35 + $12.37
Select $214.98 + $5.52
Ch-Se Spread $23.37 + $6.85

 

Futures

Feeder Cattle  Nov. 20 Change
Jan ’21 $134.600 –  $3.275
Mar $134.375 –  $2.775
Apr $136.175 –  $2.450
May $137.450 –  $2.150
Aug $143.425 –  $1.325
Sep $143.250 –  $1.850
Oct ’21 $143.200 –  $1.675
Nov $143.125 n/a

 

Live Cattle   Nov. 20 Change
Dec $108.100 –  $1.825
Feb ’21 $110.650 –  $1.575
Apr $114.450 –  $1.750
Jun $109.250 –  $1.925
Aug $108.650 –  $2.000
Oct $112.650 –  $0.975
Dec $115.125 –  $1.075
Feb ’22 $117.050 –  $0.950
Apr $117.800 –  $1.425

 

Corn  Nov. 20 Change
Dec $4.232 + $0.128
Mar ’21 $4.282 + $0.088
May $4.306 + $0.066
Jly $4.306 + $0.044
Sep $4.106 + $0.050
Oct $4.082 + $0.038

 

Oil CME-WTI Nov. 20 Change
Dec $42.15 + $2.02
Jan ’21 $42.42 + $2.02
Feb $42.64 + $1.94
Mar $42.84 + $1.83
Apr $43.02 + $1.72
May $43.15 + $1.60

 

Equities

Equity Indexes Nov. 20 Change
Dow Industrial Average  29263.48 –   216.33
NASDAQ  11854.97 +      25.68
S&P 500   3557.54 –       27.61
Dollar (DXY)       92.40 –         0.32
Cattle Current Weekly Highlights—Week ending Nov. 20, 2020 2020-11-22T15:51:24-06:00

Cattle Current Weekly Highlights—Week ending Nov. 13, 2020

Recent futures market strength, stronger wholesale beef values and higher negotiated cash fed cattle prices added support to calves and feeder cattle last week.

Steers and heifers sold $2-$5/cwt. higher, with instances of $7-$10 higher at some auctions, according to the Agricultural Marketing Service (AMS).

“Calf movement in the Northern Plains is in full swing as drought conditions bring cattle to town earlier than normal,” say AMS analysts. “With the earlier time period of marketing their calves, drought-stricken ranchers are selling less pounds which will lead to less dollars in the bank account.”

With that said, year-to-date auction receipts through last week were 487,000 head fewer than the same period last year, according to AMS; 520,000 head fewer than the five-year average. Direct receipts for the last five weeks are more than 70,000 head behind last year’s pace.

Feeder Cattle futures closed an average of $1.65 higher week to week on Friday (65¢ to $2.20 higher) except for 22¢ lower in spot Nov. That was in the face of stronger grain prices fueled by the crop friendly World Agricultural Supply and Demand Estimates (WASDE)

USDA increased the projected season-average corn price by 40¢ to $4.00/bu., on reduced expected corn yield, production and ending stocks. The same drivers were behind the 60¢ increase in the projected season-average soybean price to $10.40/bu.

Week to week on Friday, Corn futures closed an average of 7¢ higher through the front six contracts. Soybean futures closed an average of 46¢ higher through the front six contracts.

Cattle futures also gained week to week despite a sharp drop Friday, tied to apparent concerns that escalating COVID-19 cases could once again disrupt packing production.

“October was a tough month for calf prices, but if the first two weeks of November is any indication of what is to come, then cattle producers should be seeing the light at the end of the tunnel,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Steer and heifer calf prices surged the past two weeks, based on Tennessee weekly auction market average prices. It is clear that stocker and backgrounding operations still have a strong demand for weaned and preconditioned cattle, but calves being weaned on the truck have also seen a price boost…There is a good chance that freshly weaned calf values increase $20 to $30 per head before the end of the year if there is any bounce in the market at all heading into December.”

Prices in the Southern Plains were also boosted by recent moisture and elevated wheat pasture prospects.

For instance, in Oklahoma, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says prices the previous week for steers weighing 450-600 lbs. were the highest since late August and early September. He notes the combined state auction price for Medium and Large #1 steers at 450-500 lbs. the previous week was $166.89/cwt. compared to $147.34 a week earlier, when storm severity helped damper markets.

Noting currently higher value of gain for cattle heavier than 600 lbs., as well as a possibly shorter winter grazing season, Peel says, heavier starting weights might make sense for stocker producers to consider.

“The next few weeks may result in additional demand for stockers but will likely also see larger supplies of feeder cattle in Oklahoma auctions. Combined Oklahoma auction volume the past six weeks was down nearly 33%, in part due to the impacts of the winter storm,” Peel explained in his weekly market comments. “It appears there are significant numbers of calves and feeders yet to be marketed this fall. Stocker and feeder prices could move either higher or lower in the next month depending on the balance of increased demand and increased supply in auctions.”

Fed Cattle Prices Increase

Negotiated cash fed cattle tradeended the week with live prices $3 higher at $110/cwt. in Nebraska and the Southern Plains; $3-$4  higher in the western Corn Belt at $108-$110. Dressed prices were at $172, which was $4 higher in Nebraska and $5-$8 higher in the western Corn Belt. Although prices were higher, some thought the market was poised to reap steeper gains.

Through Thursday, the five-area direct weighted negotiated fed steer price was $109.46/cwt. on a live basis, which was $3.11 more than the previous week but $5.69 less than the same week in 2019. The average steer price in the beef was $171.88, which was $6.58 more week to week but $10.07 less year over year.

Live Cattle futures closed an average of 92¢ higher week to week on Friday, from 7¢ higher in near Feb to $1.65 higher.

“The value of cattle this week compared to last week represents an increase of $35 to $40 per head, which makes hitting the $115/cwt. price that much more achievable before the end of the year,” Griffith says. “The strong margins at the packer level and good beef demand have packers salivating for cattle. Some of the strong margins upstream have been passed down to cattle feeders, and cattle feeders are doing the same when purchasing feeder cattle. Optimism in the market is strong heading toward December.”

Estimated total cattle slaughter for the week ending Nov. 14 was 653,000 head, which was 6,000 head more than the previous week but 16,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 28.06 million head would be 1.07 million fewer (-3.67%) than the previous year. Estimated total year-to-date beef production was 23.31 billion lbs., which would be 253.3 million lbs. less (-0.01%) than the previous year.

Choice boxed beef cutout value was $11.66 higher week to week on Friday at $225.98/cwt. Select was $10.97 higher at $209.46. That’s $17.88 higher for Choice over the past two weeks; $18.22 higher for Select.

Carcass weights show signs of peaking following the prolonged period of fed cattle supplies backlogged by the pandemic. The average dressed steer weight of 926 lbs. the week ending Oct. 31 was 5 lbs. lighter than the previous week, though still 23 lbs. heavier than the same week last year. The average dressed heifer weight of 848 lbs. was 1 lb. heavier than the prior week and 13 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report.

“Select grade beef continues to see fairly decent demand during a time when Choice grade prime rib and other holiday cuts take center stage. There is no doubt some holiday purchasing is taking place, but the strong prices for boxed beef could just be simply demonstrating that beef prices are being supported by good demand at the consumer level,” Griffith says. “There always seems to be concern that consumer discretionary spending may move away from beef when things get tight. However, due to the pandemic, many consumers have more than ample discretionary dollars because they are not able to participate in many of their extracurricular activities. Thus, lower incomes may be evident in many households, but leisure expenditures have also been reduced. It will be interesting to see if consumer expenditures revert back to pre-pandemic tendencies moving forward.”

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 13 Auction Direct

Video/net

Total
 

305,300

(+82,400)

75,100

(+48,300)

10,400

(-8,400)

390,800

(+122,300)

 

 

CME Feeder Index

CME Feeder Index* Nov. 12 Change
  $137.35 +  $0.72

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 13 Change
600-700 lbs. $149.58 +  $1.37
700-800 lbs. $141.53 +  $0.20
800-900 lbs. $142.02 +  $1.80

 

South Central

Steers-Cash Nov. 13 Change
500-600 lbs. $151.87 + $3.03
600-700 lbs. $140.85 + $2.28
700-800 lbs. $139.69 + $4.68

 

Southeast

Steers-Cash Nov. 13 Change
400-500 lbs. $151.67 + $3.83
500-600 lbs. $138.53 + $4.27
600-700 lbs. $129.18 + $2.45

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 13 ($/cwt) Change
Choice $225.98 + $11.66
Select $209.46 + $10.97
Ch-Se Spread $16.52 + $0.69

 

Futures

Feeder Cattle  Nov. 13 Change
Nov $137.475 –  $0.225
Jan ’21 $137.825 + $1.900
Mar $137.150 + $1.975
Apr $138.625 + $2.075
May $139.600 + $2.200
Aug $144.750 + $1.625
Sep $145.100 + $1.100
Oct ’21 $144.875 + $0.650

 

Live Cattle   Nov. 13 Change
Dec $109.925 + $1.275
Feb ’21 $112.225 + $0.075
Apr $116.200 + $0.150
Jun $111.175 + $1.150
Aug $110.600 + $1.475
Oct $113.625 + $1.650
Dec $116.200 + $0.950
Feb ’22 $118.000 + $0.700
Apr $119.225 + $0.825

 

Corn  Nov. 13 Change
Dec $4.104 + $0.038
Mar ’21 $4.194 + $0.058
May $4.240 + $0.064
Jly $4.262 + $0.060
Sep $4.056 + $0.094
Oct $4.044 + $0.090

 

Oil CME-WTI Nov. 13 Change
Dec $40.13 + $2.99
Jan ’21 $40.40 + $2.91
Feb $40.70 + $2.80
Mar $41.01 + $2.67
Apr $41.30 + $2.56
May $41.55 + $2.45

 

Equities

Equity Indexes Nov. 13 Change
Dow Industrial Average  29479.81 +  1156.41
NASDAQ  11829.29 –      65.94
S&P 500   3585.15 +      75.71
Dollar (DXY)       92.72 +       0.49
Cattle Current Weekly Highlights—Week ending Nov. 13, 2020 2020-11-15T16:32:05-06:00

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