Weekly Market Highlights

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

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

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

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

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

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

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

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

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

Cash feeder prices were already under pressure, of course.

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

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

Fed Cattle Lower in Cautious Trade

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

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

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

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

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

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

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

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 16

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

104,800

(-49,800)

27,900

(-26,200)

70,100

(-171,300)

202,800

(-247,300)

 

CME Feeder Index

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

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

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

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

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

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

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

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

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

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

Cash Fed Cattle Prices Appeared Lower

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

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

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

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

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

Wholesale Values Increase

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

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

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

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

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

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

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

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

 

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 9

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

154,600

(+5,900)

54,100

(-40,100)

241,400

(+235,200)

450,100

(+201,000)

 

CME Feeder Index

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

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

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

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

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

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

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

Cattle futures, especially Feeder Cattle melted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 2

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

148,700

(+17,500)

94,200

(+31,700)

6,200

(-107,600)

249,100

(-58,400)

 

CME Feeder Index

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

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

Cattle Current Weekly Highlights—Week ending July 26, 2019

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

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

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

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

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

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

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

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

Fed Cattle Prices Looked Steady to Higher

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

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

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

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

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

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

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

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

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

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

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 26

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

131,200

(-18,200)

62,500

(+3,300)

113,800

(-103,400)

307,500

(-118,300)

 

CME Feeder Index

CME Feeder Index* July 25 Change
  $139.58 + 0.93

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

Cattle Current Weekly Highlights—Week ending July 19, 2019

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

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

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

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

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

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

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

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

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

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

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

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 19

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

149,400

(+13,700)

59,200

(-18,500)

217,200

(+5,400)

425,800

(+90,300)

 

CME Feeder Index

CME Feeder Index* July 18 Change
  $138.67 –  2.39

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

Cattle Current Weekly Highlights—Week ending July 12, 2019

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

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

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

moved back into the market,” say AMS analysts.

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

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

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

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

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

Fed Cattle Prices Appeared Higher

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

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

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

large numbers of cattle on feed.”

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

Wholesale beef values continue the seasonal decline.

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

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

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

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

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

Corn Price Uncertainty Continues

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

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

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

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 12

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

135,700

(+111,000)

77,700

(+50,500)

121,100

(+81,900)

335,500

(+244,400)

 

CME Feeder Index

CME Feeder Index* July 11 Change
  $141.06 + 7.85

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

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

 

South Central

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

 

Southeast

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

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

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

 

Futures

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

 

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

 

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

 

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

 

Equities

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

Cattle Current Weekly Highlights—Week ending July 5, 2019

Many auctions were shuttered in observance of Independence Day, but a firmer undertone was noted for steers and heifers at the ones that did take place, according to the Agricultural Marketing Service (AMS).

Likewise, Cattle futures, especially Feeder Cattle closed higher week to week, amid lighter overall trade due to the holiday.

Feeder Cattle futures closed an average of $2.31 higher week to week on Friday.

That was with Corn futures closing an average of 11¢ higher through the front six contracts week to week on Friday, recovering about half of the previous week’s decline.

Fed Cattle Prices Steady to Higher

Negotiated cash fed cattle trade provided overall support.

Live prices were steady in the Southern Plains at $109/cwt. on a live basis, but $1-$2 higher in Nebraska at $113.00-$113.50 and at $112-$114 in the western Corn Belt. Dressed trade was steady to $2 higher at $180.

Through Thursday, the weighted average 5-Area Direct price for steers was 59¢ higher than the prior week at $111.17/cwt. on a live basis. The dressed price was 74¢ higher at $180.10.

Carcass weights continue lighter year over year. Average dressed steer weight for the week ending June 22 was 854 lbs., according to USDA’s Actual Slaughter Under Federal Inspections report. That was 4 lbs. lighter than the same week a year earlier. Average dressed heifer weight of 790 lbs. was 3 lbs. lighter. Fed slaughter of 537,433 head was 3,875 head more than last year. Total slaughter of 668,269 head was 9,773 head more. Beef production of 533.2 million lbs. was 4.3 million lbs. more.

Live Cattle futures were an average of $2.46 higher week to week on Friday.

“With feed costs destined to be somewhat higher in the second half of the year, feedlots will have some incentive to trim back days on feed suggesting lighter finished and, thus, carcass weights,” explained Derrell Peel, Extension livestock Marketing Specialist at Oklahoma State University, in his weekly market comments. “However, feedlots do this largely by placing heavier feeder cattle, which need fewer days to finish. Heavier placement weights imply heavier finish weights. Feedlot data shows that every one pound increase in placement weight results in about one-half pound increase in finished weight. Thus, the impact of higher feed prices on carcass weights is unclear but is unlikely to have a major impact.”

Choice boxed beef cutout value was $1.99 lower week to week on Friday afternoon at $217.67/cwt. Select was 76¢ lower at $194.80.

“As long as beef demand does not weaken appreciably in the reminder of the year, fed cattle prices are expected to average about equal to 2018 levels for an annual average,” Peel says. “Fed prices are expected to be slightly lower year over year in the third quarter before strengthening in the fourth quarter. Feeder prices are generally expected to average 3-5% below 2018 levels for the remainder of the year and for an annual average.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

July 5

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

n/a

(n/a)

27,200

(-8,500)

39,200

(-6,900)

66,400

(-171,600)

 

CME Feeder Index

CME Feeder Index* July 4 Change
  $133.21 + 0.60

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 5 Change
600-700 lbs. n/a n/a
700-800 lbs. n/a n/a
800-900 lbs. n/a n/a

 

South Central

Steers-Cash July 5 Change
500-600 lbs. n/a n/a
600-700 lbs. n/a n/a
700-800 lbs. n/a n/a

 

Southeast

Steers-Cash July 5 Change
400-500 lbs. n/a n/a
500-600 lbs. n/a n/a
600-700 lbs. n/a n/a

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 5 ($/cwt) Change
Choice $217.67 –   $1.99
Select $194.80 –   $0.76 
Ch-Se Spread $22.87 –   $1.23

 

Futures

Feeder Cattle  July 5 Change
Aug $138.825 + $1.975
Sep $138.700 + $2.000
Oct $138.900 + $2.200
Nov $139.225 + $2.350
Jan ’20 $137.950 + $2.875
Mar $136.875 + $2.850
Apr $137.575 + $2.075
May $138.050 + $2.175

 

Live Cattle   July 5 Change
Aug $107.000 + $2.650
Oct $108.875 + $3.450
Dec $112.325 + $2.075
Feb ’20 $116.225 + $2.100
Apr $118.300 + $2.075
Jun $111.475 + $2.375
Aug $109.825 + $2.325
Oct $111.825 + $2.400
Dec $113.100 + $2.675

 

Corn futures July 5 Change
Jul $4.340 + $0.138
Sep $4.386 + $0.140
Dec $4.422 + $0.108
Mar ’20 $4.490 + $0.096
May $4.524 + $0.094
Jul $4.556 + $0.096

 

Oil CME-WTI July 5 Change
Aug $57.51 –  $0.96
Sep $57.59 –  $0.93
Oct $57.56 –  $0.84
Nov $57.48 –  $0.74
Dec $57.35 –  $0.63
Jan ’20 $57.17 –  $0.54

 

Equities

Equity Indexes July 5 Change
Dow Industrial Average  26922.12 + 322.16
NASDAQ     8161.79 + 155.55
S&P 500     2990.41 +  48.65
Dollar (DXY)          97.17 +    1.04
Cattle Current Weekly Highlights—Week ending July 5, 2019 2019-07-07T13:40:20-05:00

Cattle Current Weekly Highlights—Week ending June 28, 2019

Calves and feeder cattle sold from $3/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). Analysts there note that some auctions reported instances of $8-$10 higher.

“Many loads of yearlings were in the supply this week as several barns held pre-Fourth of July special sales,” explain AMS analysts. “Cattle feeders had the opportunity to make like-kind purchases and they were willing to step in and own them, especially after the CME Cattle Complex moved sharply higher on Wednesday.”

Feeder Cattle futures closed an average of $1.99 higher week to week on Friday ($1.32 higher to $3.17 higher in spot Aug). That included the aforementioned mid-week bounce on over-sold conditions.

“Following a nearly $30/cwt. decline in Feeder Cattle futures from the middle of April to the end of May, most contracts have traded in a $10 range during June,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A range of $10 appears small when comparing

it to a change of $30, but a $10 price range on a Feeder Cattle contract is $80 per head or $5,000 per contract.

Friday’ s Acreage report provided lift with USDA reporting producers intended to plant 91.7 million acres of corn, up 3% from last year. That’s less than the 92.8 million acres estimated in the March Prospective Plantings report, but more than the 89.8 million acres estimated by the World Agricultural Outlook Board in the June World Agricultural Supply and Demand Estimates, and about 5 million acres more than average estimates ahead of the report.

Corn futures closed an average of 20¢ lower through the front six contracts week to week on Friday.

“From a longer term perspective, the probability of correctly predicting the price direction is much easier than in the near term,” Griffith says. “For instance, feeder cattle and calf prices are fairly low on the cash market and the futures market. Seasonal trends would suggest calf prices will decline further moving through the summer and fall, while feeder cattle prices are expected to garner some support. For anyone expecting to market cattle before the end of the year, do not expect prices to have a miraculous resurgence. Alternatively, today’s cattle market is soft. It would take something catastrophic to send calf and feeder cattle prices severely lower. Most producers know when they will be marketing cattle so

they should start early considering ways to price those cattle at profitable levels.”

Fed Cattle Prices Appeared Mostly Sideways

Negotiated cash fed cattle trade began to develop by late Friday afternoon, but there were too few transactions to trend in any region.

Early live sales in the Southern Plains were at $109/cwt. on a live basis, in the middle of the previous week’s trading range. The Texas Cattle Feeders Association also reported its members trading at $109. Early live sales in Nebraska were steady to higher at $109.00-$111.50. In the western Corn Belt, though, the $109-$112 for early live sales was $1-$3 less than the previous week. Earlier week dressed sales in the latter two regions were at $180, which was steady in Nebraska and steady to lower in the western Corn Belt.

Through Thursday, the 5-area direct weighted average live price for steers was $110.58/cwt., about even with the previous week.

Live Cattle futures closed an average of $1.38 higher week to week on Friday (42¢ higher to $3.95 higher in expiring Jun).

Choice boxed beef cutout value was 16¢ lower week to week on Friday afternoon at $219.66/cwt. Select was $3.99 lower at $195.56.

“The lack of summer thus far has limited seasonal beef demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “After early beef buying in April for Memorial Day, boxed beef cutout values have weakened, averaging 3.8% lower year over year for the last six weeks. The daily boxed beef price last Friday (June 21) was down 6.2% from the peak price in late April. The weakness has been most pronounced in the high value middle meats, with loin primals averaging 7.9% lower year over year for the last six weeks and rib primals averaging 5.5% lower year over year for the same period. Chuck and round primals have fared somewhat better with round primals down only 1.8% year over year and chuck primals up an average of 1.3% over the last six weeks, compared to the same period last year…Encouragingly, the ground beef market is showing a little life with both lean trimmings and 50% trimmings currently priced a bit higher compared to last year.”

Moreover, Griffith says recently stronger retail prices are helping reduce frozen beef inventories.

“The quantity of beef in cold storage at the end of May totaled 403.6 million lbs., which was 106.7 million lbs. less than the end of January and the lowest level of beef in cold storage since November 2014,” Griffith explains. “The all fresh retail price of beef in May was $5.89/lb. which was 21¢/lb.higher than May 2018 and 19¢/lb.higher than January 2019. The strong retail value of beef has provided incentive to pull beef out of storage and capture a strong margin.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

June 28

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

156,200

(+300)

35,700

(-5,900)

46,100

(+31,100)

238,000

(+25,500)

 

CME Feeder Index

CME Feeder Index* June 27 Change
  $132.613 + 1.18

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 28 Change
600-700 lbs. $164.18 + $10.68
700-800 lbs. $148.35 + $7.14
800-900 lbs. $136.83 –  $0.12

 

South Central

Steers-Cash June 28 Change
500-600 lbs. $155.93 –  $2.35
600-700 lbs. $146.96 –  $0.97
700-800 lbs. $137.99 +  $2.71

 

Southeast

Steers-Cash June 28 Change
400-500 lbs. $146.62 –  $0.94
500-600 lbs. $140.81 +  $1.62
600-700 lbs. $133.24 +  $2.67

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 28 ($/cwt) Change
Choice $219.66 –   $0.16
Select $195.56 –   $3.99  
Ch-Se Spread $24.10 +  $3.83

 

Futures

Feeder Cattle  June 28 Change
Aug $136.850 + $3.175
Sep $136.700 + $2.650
Oct $136.700 + $2.200
Nov $136.875 + $2.000
Jan ’20 $135.075 + $1.600
Mar $134.025 + $1.325
Apr $135.500 + $1.400
May $135.875 + $1.600

 

Live Cattle   June 28 Change
Jun $110.500 + $3.950
Aug $104.350 + $2.125
Oct $105.425 + $1.275
Dec $110.250 + $1.225
Feb ’20 $114.125 + $0.750
Apr $116.225 + $0.925
Jun $109.100 + $1.000
Aug $107.500 + $0.750
Oct $109.425 + $0.425

 

Corn futures June 28 Change
Jul $4.202 –  $0.220
Sep $4.246 –  $0.228
Dec $4.314 –  $0.220
Mar ’20 $4.394 –  $0.198
May $4.430 –  $0.184
Jul $4.460 –  $0.172

 

Oil CME-WTI June 28 Change
Aug $58.47 + $0.97
Sep $58.52 + $1.10
Oct $58.40 + $1.15
Nov $58.22 + $1.18
Dec $57.98 + $1.19
Jan ’20 $57.71 + $1.19

 

Equities

Equity Indexes June 28 Change
Dow Industrial Average  26599.96 –  119.17
NASDAQ     8006.24 –   25.47
S&P 500     2941.76 –     8.70
Dollar (DXY)          96.13 +    0.04
Cattle Current Weekly Highlights—Week ending June 28, 2019 2019-06-29T17:05:28-05:00

Cattle Current Weekly Highlights—Week ending June 21, 2019

Higher grain prices continued to batter calf and feeder cattle markets last week. At least, that’s the fundamental explanation, along with stout cattle supplies and lower year-over-year exports.

Steers and heifers sold from $3/cwt. lower to $2 higher, according to the Agricultural Marketing Service (AMS).

“Severe thunderstorms and extreme flooding remain across the Northern and Southern Plains. This is limiting movement for feeders and delaying wheat harvest,” explained the AMS reporter on hand for Thursday’s Superior Livestock Video auction.

“The feeder cattle index ($131.43 on Thursday) is at its lowest price level since March 2017, and there does not appear to be any relief in sight as the fundamental supply and demand factors appear as if they will continue to pressure prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Feeder Cattle futures closed an average of $1.46 lower week to week on Friday, across the front half of the board and then an average of 40¢ lower.

“The questions producers have to ask is if they can be profitable with steer calves valued between $700 and $750 per head and heifer calves valued closer to $600 to $650 per head at weaning,” Griffith says. “One factor that is pushing feeder cattle prices lower is higher corn prices. Higher corn prices provide more incentive to put more weight on cattle outside the feedlot and this will likely remain true heading into the fall marketing time period. This brings forth a management decision that producers should already be considering in the form of backgrounding calves instead of selling off the cow.”

Fed Cattle Prices Drop

Negotiated cash fed cattle prices were $2-$4 lower on a live basis at $108-$110/cwt. in the Southern Plains, mostly $110 in Nebraska and at $113-$114 in the western Corn Belt. Dressed trade was $3-$4 lower in Nebraska at $180-$183 and $6 lower in the western Corn Belt at $178-$180.

Live Cattle futures an average of $1.19 lower week to week on Friday (72¢ to $2.25 lower in spot Jun).

“Live Cattle futures continue to find a way to scrape the bottom of the barrel, which keeps forcing cash prices lower,” Griffith explains. “A couple of months ago, it would have been absurd to fathom Live Cattle futures trading below $100. However, trading below $100 does not seem out of the question with the August contract closing the week just above $102/cwt. It will take serious work for finished cattle prices to drop another $10/cwt. this summer, but that does not mean the futures market cannot find a way to get there. Lower finished cattle prices and higher corn prices will put a pinch on cattle feeders, which means they will be forced to bid down feeder cattle. It is the only place to make margin in the current market.”

“Cattle feeders have approached the dog days of summer cautiously this year, with cost of gains expected to creep up with the lack of corn acres being planted nationwide this year,” say AMS analysts. “Flesh condition of cattle has really been attractive after the cold, wet, muddy conditions cattle have had to endure to this point. Backgrounders have historically sold cattle this time of year and probably wouldn’t hold on this long if the crystal ball would’ve predicted a much lower market for short and long yearlings.”

Wholesale beef prices are offering no extra support as they wallow between seasonal weakness and the still-delayed grilling season across wide swaths of the nation.

Choice boxed beef cutout value was $2.41 lower week to week on Friday afternoon at $219.82/cwt. Select was $3.21 lower at $199.55, the lowest since December.

Feedlot Placements Lower

Markets will likely view Friday’s monthly Cattle on Feed report—feedlots with 1,000 head or more capacity—as neutral to slightly bearish.

Placements in May of 2.06 million head were 2.82% less (-60,000 head) than the previous year, whereas expectations ahead of the report were for a decline of about 4%.

Marketings in May of 2.07 million head were 0.68% more (+14,000 head) than the previous year. Expectations ahead of the report were for an increase of 0.80%.

Cattle on feed June 1 of 11.74 million head were 1.62% more (+187,000 head) more than last year, the most for the month since the data series began in 1996. Heading into the report, expectations were for an increase of 1.30%.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

June 21

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

159,800

(+24,900)

41,600

(-11,300)

15,000

(-34,400)

216,400

(-20,800)

 

CME Feeder Index

CME Feeder Index* June 20 Change
  $131.43 –  2.82

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 21 Change
600-700 lbs. $153.50 – $10.27
700-800 lbs. $141.21 –  $6.85
800-900 lbs. $136.95 +  $1.09

 

South Central

Steers-Cash June 21 Change
500-600 lbs. $158.28 +  $1.61
600-700 lbs. $147.93 +  $1.14
700-800 lbs. $135.28 –  $1.26

 

Southeast

Steers-Cash June 21 Change
400-500 lbs. $147.56 –  $6.21
500-600 lbs. $139.19 –   $4.32
600-700 lbs. $130.57 –   $2.26

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 21 ($/cwt) Change
Choice $219.82 –   $2.41
Select $199.55 –   $3.21  
Ch-Se Spread $20.27 +  $0.80

 

Futures

Feeder Cattle  June 21 Change
Aug $133.675 –  $1.850
Sep $134.050 –  $1.750
Oct $134.500 –  $1.250
Nov $134.875 –  $1.000
Jan ’20 $133.475 –  $0.375
Mar $132.700 –  $0.375
Apr $134.100 –  $0.375
May $134.275 –  $0.475

 

Live Cattle   June 21 Change
Jun $106.550 – $2.225
Aug $102.225 – $2.050
Oct $104.150 – $1.325
Dec $109.025 – $0.925
Feb ’20 $113.375 – $0.725
Apr $115.300 – $0.875
Jun $108.100 – $0.825
Aug $106.750 – $0.775
Oct $109.000 – $1.000

 

Corn futures June 21 Change
Jul $4.422 –  $0.108
Sep $4.474 –  $0.108
Dec $4.534 –  $0.100
Mar ’20 $4.592 –  $0.082
May $4.614 –  $0.070
Jul $4.632 –  $0.048

 

Oil CME-WTI June 21 Change
Jul $57.43 + $4.92
Aug $57.50 + $4.73
Sep $57.42 + $4.47
Oct $57.25 + $4.25
Nov $57.04 + $4.03
Dec $56.79 + $3.81

 

Equities

Equity Indexes June 21 Change
Dow Industrial Average  26719.13 + 629.52
NASDAQ     8031.71 +  235.05
S&P 500     2950.46 +   63.48
Dollar (DXY)          96.09 –       1.48
Cattle Current Weekly Highlights—Week ending June 21, 2019 2019-06-22T19:19:04-05:00

Cattle Current Weekly Highlights—Week ending June 14, 2019

Despite futures pressure stemming from higher grain prices, cash feeder cattle mostly gained, perhaps with increased demand as more feedlots get cleaned up.

Steers and heifers sold steady to $5/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Demand was reported as moderate to good across the Northern and Southern Plains as buyers were willing to put cattle back in pens even with the uptick in corn prices,” note AMS analysts. 

Feeder Cattle futures closed an average of $1.90 lower week to week on Friday ($1.55 to $2.45 lower). Over the same period, Corn futures closed an average of 34¢ higher through the front three contracts, as weather challenges both planted acres and yield.

“Steer and heifer calf prices are now expected to fall by about 3% in 2019 relative to last year, equivalent to taking between $4-$7/cwt. out of 500-600 lb. calf prices in the Southern Plains,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. They peg the season-average corn price at $4.50/bu.

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee points out Dec Corn futures are up a staggering 80¢ since the middle of May.

“The market is already pricing corn in such a way to ration its use over the next 12-15 months,” Griffith explains. “Understanding that fewer acres of corn have been planted this year and yields are expected to be negatively impacted by later planting, fewer bushels of corn will pressure cattle markets the next 12 months as corn prices remain elevated.”

At the same time, Griffith points out the excessive moisture challenging row crops is fueling forage growth.

“…feedlots will be looking for heavier cattle to place in the feedlot which means there will be incentive to add weight to cattle the next several months,” Griffith says.

Fed Cattle Soften in Sluggish Trade

Neither cattle feeders nor packers seemed possessed to swap cattle.

Negotiated cash fed cattle trade for the week appeared steady to either side of even in two regions through Friday afternoon. The only established prices reported by USDA during the week were for the western Corn Belt: mainly steady on a live basis at $114-$115/cwt. and steady to $2 higher in the beef at $184-$186. There were prices reported in other regions at mostly $1-$2 lower than the previous week but too few to trend. On Friday, the Texas Cattle Feeders Association reported its members trading at $112, which was $1 less than the previous week.

Both carcass weights and grading percentages continue to suggest that feedlot marketing is current, with no backlog building in the wings.

Live Cattle futures closed mixed week to week on Friday: an average of $1.08 higher through the front four contracts (52¢ to $1.85 higher) and then an average of 40¢ lower, except for 20¢ higher at the back.

In the latest World Agricultural Supply and Demand Estimates (WASDE), USDA analysts forecast $118/cwt. for the 5-area Direct fed steer price in the second quarter, followed by $110 in the third quarter and $114 in the fourth.

Year to date, AMS notes that heifer slaughter rate is 8.7% more than last year, with beef cow slaughter up 2.6%, perhaps suggesting further pressure on limited herd expansion.

“Preliminary heifer slaughter through May is about 50,000 head short of 4 million head,” say AMS analysts. “The last time January-to-May heifer slaughter eclipsed the 4 million mark was 2011.”

Choice boxed beef cutout value was 8¢ lower week to week on Friday afternoon at $222.23/cwt. Select was $4.16 lower at $202.76.

“Weaker beef demand may be the biggest threat to cattle and beef markets for the remainder of the year,” explained Derrell Peel, Extension livestock marketing specialist, in his weekly market comments. “Strong beef demand supported cattle and beef markets in 2017 and 2018, but there are signs that some weakness may be developing in beef demand in both domestic and international markets. While unemployment remains very low, other indications of weakness in the macro-economy are concerning and have led to reduced forecasts for U.S. economic growth in 2019; largely due to ongoing impacts of tariffs and trade disruptions. Relatively slow domestic income growth and higher prices for major consumer items, such as gasoline, combined with record large supplies of beef, pork and poultry may be limiting domestic beef demand going forward in 2019.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

June 14

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

134,900

(-29,100)

52,900

(+22,600)

49,400

(+37,300)

237,200

(+30,800)

 

CME Feeder Index

CME Feeder Index* June 13 Change
  $134.25 + 2.38

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 14 Change
600-700 lbs. $163.77 +  $10.35
700-800 lbs. $148.06 +  $4.87
800-900 lbs. $135.86 +  $1.83

 

South Central

Steers-Cash June 14 Change
500-600 lbs. $156.38 +  $1.61
600-700 lbs. $146.89 +  $1.14
700-800 lbs. $136.54 +  $1.76

 

Southeast

Steers-Cash June 14 Change
400-500 lbs. $153.77 +  $2.22
500-600 lbs. $143.51 –   $0.10
600-700 lbs. $132.83 –   $0.62

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 14 ($/cwt) Change
Choice $222.23 –   $0.08
Select $202.76 –   $4.16  
Ch-Se Spread $19.47 +  $4.08

 

Futures

Feeder Cattle  June 14 Change
Aug $135.525 –  $1.725
Sep $135.800 –  $1.550
Oct $135.750 –  $1.625
Nov $135.875 –  $1.475
Jan ’20 $133.850 –  $1.975
Mar $133.075 –  $2.350
Apr $134.475 –  $2.025
May $134.750 –  $2.450

 

Live Cattle   June 14 Change
Jun $108.775 + $1.850
Aug $104.275 + $0.975
Oct $105.475 + $0.975
Dec $109.950 + $0.525
Feb ’20 $114.100 – $0.075
Apr $116.175 – $0.300
Jun $108.925 – $0.750
Aug $107.525 – $0.475
Oct $110.000 + $0.200

 

Corn futures June 14 Change
Jul $4.530 + $0.374
Sep $4.582 + $0.340
Dec $4.634 + $0.298
Mar ’20 $4.674 + $0.250
May $4.684 + $0.228
Jul $4.6.80 + $0.198

 

Oil CME-WTI June 14 Change
Jul $52.51 –  $1.48
Aug $52.77 –  $1.39
Sep $52.95 –  $1.32
Oct $53.00 –  $1.25
Nov $53.01 –  $1.18
Dec $52.98 –  $1.12

 

Equities

Equity Indexes June 14 Change
Dow Industrial Average  26089.61 + 105.67
NASDAQ     7796.66 +   54.56
S&P 500     2886.98 +   13.64
Dollar (DXY)          97.45 +    0.89
Cattle Current Weekly Highlights—Week ending June 14, 2019 2019-06-16T14:36:13-05:00

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