Weekly Market Highlights

Significantly higher June feedlot placements than anticipated (reported in the monthly Cattle on Feed report a week earlier) pressured cash and futures prices for feeder cattle, especially early in the week.

Yearling steers and heifers sold mostly steady to $8 lower, according to the Agricultural Marketing Service (AMS), although some late-week sales trended $4-$6 higher. A light offering of calves nationwide traded from $4 lower to $4 higher.

“Receipts were light in the major sale barns as cattle producers sat on the sidelines and waited to see how the market would react to the negative news (Cattle on Feed report),” AMS analysts say. “The extreme hot temperatures early on also kept producers from moving cattle.”

Feeder cattle futures closed an average of $4.38 lower week to week on Friday ($2.67 to $6.90 lower).

Additional market pressure stemmed from talks that Japan might increase the tariff on frozen beef from the U.S. and other countries via a safeguard mechanism that goes back to 1994. Japan confirmed on Friday that it will employ the safeguard. The tariff on frozen U.S. beef exported to Japan will increase from 38.5% to 50.0%, beginning Aug. 1 and last through March of next year.

Negotiated cash fed cattle trade was mainly $1-$3 lower than the previous week at mostly $117/cwt. Dressed trade was $1-$4 lower at $187-$188.

Live Cattle futures closed an average of $3.24 lower week to week on Friday ($1.87 to $4.97 lower).

Choice boxed beef cutout value was 69¢ lower week to week on Friday afternoon at $206.22/cwt. Select was $2.02 higher at $196.82.

“Strong demand for beef has helped support beef prices the first seven months of the year,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Domestic demand is expected to remain strong, but export demand is less certain considering several trade issues and policy. Packers will continue harvesting a large number of cattle as long as margins are positive.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Steers and heifers sold $3-$6/cwt. higher, with instances $8-$10 higher, according to the Agricultural Marketing Service (AMS).

“In the north, farmer feeders are driving the market, particularly for big strings of big yearlings, and especially for those of one raising,” AMS analysts say. “One didn’t have to look too hard to find impressive prices, as yearlings sold with excellent demand all over cattle country, regardless of whether the Board was sharply higher or significantly lower that particular day.”

With extreme summer heat across wide swaths of the nation, AMS analysts noted, “Multiple reports trickled in through the week that any cattle carrying extra hair were subject to discount, but otherwise, demand remained very good despite the high heat.”

Feeder Cattle futures closed an average of 91¢ lower week to week on Friday (87¢ to $1.35 lower).

Moreover, cash feeder cattle markets held their ground in the face of increasingly volatile grain futures prices spurred along by drought worries.

Cash fed cattle sales ended up steady to $2 higher compared to the previous week at mostly $120/cwt. Dressed trade was steady to $1 lower at $189-$190.

Week to week, Live Cattle futures closed an average of $1.12 lower through the front three contracts and then mostly narrowly mixed.

Although declines moderated, wholesale beef values continued to lose seasonal ground. Week to week Choice boxed beef cutout value was $2.44 lower on Friday afternoon at $206.91/cwt. Select was 62¢ lower at $194.80.

The big story heading into this week will likely be the monthly Cattle on Feed report that shows June placements 16.1% more than a year earlier.

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

There were too few comparable sales to for an accurate trend in cash calf and feeder cattle prices—due to the previous holiday week—but trade was active on moderate supplies and moderate to very good demand, according to the Agricultural Marketing Service (AMS).

“Demand remains excellent for long-time weaned calves and yearlings coming off of grass,” AMS analysts say. “As typical in the summer months, many un-weaned calves are beginning to make their way to sale barns; however, these are selling on limited demand. Cattle buyers throughout the Plains continue to demonstrate caution as the hot, humid weather has set in.”

Week to week on Friday, Live Cattle futures were an average of $3.49 higher. Feeder cattle futures were an average of $8.18 higher.

Although wholesale beef values continued lower, cash fed cattle prices were mostly $2-$3 higher than the previous week at mostly $120/cwt. Dressed trades were mostly $3 higher at $191.

Week to week, Choice boxed beef cutout value was $9.49 lower Friday afternoon at $209.35/cwt. Select was $7.09 lower at $195.42.

“Slaughter cattle have continued to move at a good pace, with the year-to-date slaughter 5.9% higher than a year ago,” AMS analysts say. “This provides support to the feeder cattle market and was demonstrated during this week’s feedlot trade.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Most auctions were closes for the 4^th of July holiday last week, but trade was active and demand was good at the few late-week sales on heavy offerings, according to the Agricultural Marketing Service (AMS).

“Despite the lower trends in boxed beef, futures, and feedlot trade throughout the last several weeks, many feeders continue to trend at higher prices,” AMS analysts say. “There is good demand from farmer feeder participation, with many thinking they can make a profit or break even when factoring in costs at these price levels.”

Feeder Cattle futures closed an average of $3.03 lower week to week on Friday ($2.05 to $3.85 lower).

Live Cattle futures closed an average of 93¢ lower week to week on Friday (7¢ to $1.52 lower).

Wholesale beef values and cash fed cattle prices continued to decline seasonally.

Cash fed cattle prices were mainly $1 lower in the Southern Plains and Northern Plains at $118/cwt. on a live basis, with a few in Nebraska $1 higher than the previous week at $119. They were $1-$2 lower in Iowa-Minnesota at $117-$118. Dressed trade for the week was $2 lower at $188.

Choice boxed beef cutout value was $5.89 lower week to week on Friday at $218.84/cwt. Select was $5.91 lower at $202.51.

“The price decline has yet to turn margins negative because packers continue to purchase cattle for lower prices each week, and wholesale beef prices are strong,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the softening prices do not mean there is no concern about the future. Wholesale beef prices are likely to continue slipping the next few weeks, as Labor Day is the last remaining summer grilling holiday. Purchases for Labor Day will not support beef prices for at least a month, as the holiday weekend is still eight weeks away. Packers will work diligently to maintain price levels the next several weeks, but they will continue to harvest a large number of animals which will keep beef production elevated and put pressure on prices.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Due in part to the fact that most auctions will be closed the week of July 4^th, feeder cattle traded mainly steady to higher on moderate to active trading, despite lower prices for cash fed cattle and wholesale beef.

Feeder steers and heifers sold mostly steady to $5 higher, according to the Agricultural Marketing Service (AMS), although there were some instances of $3 lower. Feeder steers and heifers in the Southeast traded from $4 lower to $5 higher.

Feeder Cattle futures closed an average of $4.31 higher week to week on Friday ($2.97 to $5.27 higher).

“Cattle buyers paid little attention to the board (futures) this week and continued to bid until orders were filled as many livestock markets will be closed in observance of the 4th of July holiday,” said AMS analysts. “All major markets will be closed next week, with very few late-week auctions open for business.”

In the meantime, expanding drought in the Northern Plains is altering cattle marketing plans.

“In the north, feeder cattle are making their way to the sale barn, with many coming in off of feed or from a backgrounder versus grass, as the area is still experiencing dry conditions,” AMS analysts say. “Due to these circumstances, many of the feeders may be carrying more flesh than what is usually observed. The dry conditions are also driving producers to send stocker cows to the market.”

Negotiated cash fed cattle trade for the week was $3-$5 lower at mostly $118-$119/cwt. Dressed trade was mostly $4-$5 lower at $189-$191.

Choice boxed beef cutout value was $15.02/cwt. lower week to week on Friday at $224.73. Select was $8.30 lower at $208.42. The Choice-Select spread narrowed $6.72 to $16.31.

Except for a dime lower in expiring Jun, Live Cattle futures closed an average of $2.35 higher week to week on Friday ($1.02 to $2.77 higher).

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Steers and heifers sold mostly $2-$8/cwt. lower last week, according to the Agricultural Marketing Service (AMS). Yearlings and heavyweight steers sold steady to weak with lower undertones, as Feeder Cattle futures lost ground most of the week.

Feeder Cattle futures closed $2.13 lower week to week on Friday ($1.15-$3.12 lower).

“The supply of feeder cattle is fairly tight as there is competition in the marketplace with farmers trying to buy cattle at lower prices, especially farmer feeders with old-crop corn to feed,” AMS analysts explained.

Cash fed cattle prices continued lower with seasonal pressure.

Choice boxed beef cutout value was $10.09 lower week to week on Friday at $239.75/cwt. Select was $3.08 lower at $216.72. The sharp narrowing to the Choice Select spread points to both demand preference and that more Choice cattle are available relative to demand.

Live negotiated cash fed cattle trade was $5-$11 lower at $121-$123/cwt. Live trade in Nebraska was $9-$11 lower at $121-$123; dressed sales were $7-$17 lower at $193-$198. Live Cattle futures closed an average of $2.46 lower week to week on Friday ($1.60-$3.05 lower).

Still, the volume of cash fed cattle sales remains strong, while carcass weights continue to trend lower.

“In the Livestock Slaughter report (NASS), the average dressed carcass weights of steers and heifers have dropped 25 lbs. since last year,” AMS analysts say. “Since the previous report covering April, steer carcasses decreased 13 lbs. and heifer carcasses decreased 20 lbs., indicating feedlots are staying current and that green cattle are being sold for slaughter.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Steers and heifers sold $5-$10/cwt. lower last week, according to the Agricultural Marketing Service (AMS). Pressure in the cash market came from tumbling Cattle futures prices and sharply lower fed cattle prices.

At the same time, auction receipts drifted lower with rising temperatures and summer sale barn schedules.

“Feedyard pen space is almost getting to be a premium now after the large supplies of feeders going through the marketplace in the last 45-60 days,” AMS analysts say.

Feeder Cattle futures closed an average of $6.15 lower week to week on Friday ($5.37 to $6.45 lower).

Cash fed cattle prices were mostly $5-$9 lower in sluggish, spotty trade at $128-$135. Dressed sales were from $5-$7 lower ($208-$215) to as much as $15 lower late in the week at $200 in Nebraska.

After $9.55 lower in spot June, Live Cattle futures closed an average of $4.35 lower week to week ($2.92 to $5.67 lower).

“The Choice-Select spread exceeded $30/cwt. as packers continued to pursue the higher quality product from show lists that are reported to be on the green side,” AMS analysts say.

“Following the first major grilling holiday, beef prices are usually supported by other grilling holidays, but prices do begin to soften,” explained Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As Father’s Day approached and Independence Day approaches, there have not been any signs of the market moving lower. The Choice and Select cutout prices would indicate strong demand for beef products as production remains above a year ago, as do prices.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Yearling steers and heifers sold steady to $8/cwt. higher, according to the Agricultural Marketing Service (AMS). They traded $2-$5 higher in the Southeast. Steer and heifers calves traded steady to $5 higher.

“Extreme heat plagued parts of the Plains and Midwest with temperatures topping in the mid 90’s, which slowed cattle movement in some areas,” AMS analysts explained. “In the Southern Plains and southern Midwest, where you see more yearling crossbred cattle with exotic influence, the price margins narrowed between Medium and Large #1 and #1-2 feeders. This is due to the fact that these type of cattle can go anywhere this time of year due to warmer temperatures.”

Increasing demand for calves and feeder cattle was evident despite volatile and lower Cattle futures prices.

Week to week on Friday, Feeder Cattle futures closed an average of $2.99 lower across the front five contracts ($1.00 to $4.55 lower) and then an average of 57¢ higher.

After 42¢ higher in spot Jun Live Cattle futures closed an average of 77¢ lower (5¢ to $2.20 lower).

“There was some evidence that the sharp turn in the futures affected a few cattle markets during the middle of the week,” AMS analysts said. “However, most traders shook off the negative news and continued to purchase yearlings at higher prices as feedlots are trying to keep up with packer demand and keep pen space full.”

There was no such eagerness from packer buyers. Only about 25% of the 1,396 head offered sold in the weekly Fed Cattle Exchange auction—moved from Wednesday to Thursday due to technical problems. The weighted average price was $136.75 for delivery at 1-17 days.

By late Friday afternoon, though, country trade for the week had yet to materialize to any degree. There were a few live sales ($136) and a few in the beef ($218), about square in the middle of steady money—in Nebraska and the western Corn Belt—but too few to trend.

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Surprisingly strong cash fed cattle prices and support from the futures market helped steers and heifers sell $2-$7/cwt. higher in the cash market last week, according to the Agricultural Marketing Service (AMS). There were instances of as much as $9-$11 higher.

Feeder Cattle futures closed an average of $8.45 higher week to week.

Cash fed cattle prices surged mostly $4-$7 higher on a live basis at mostly $134.00-$137.50/cwt. Dressed trade was up to $10 higher week to week at $215-$220.

Week to week, Live Cattle futures closed an average of $6.69 higher across the front half of the Board and then an average of $3.97 higher.

“It is difficult to determine at this time if this is a brief shock to the market due to being short-bought at the packer level or if retail demand is simply that strong,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, put it this way in his weekly market comments.

One certainty is that demand for Choice cattle continues to run ahead of supply, as evidenced by the historically high Choice-Select spread.

“Packer profitability has been better than expected and helped improve cash prices after sliding the past couple of weeks,” AMS analysts say. “Fewer cattle have been grading Choice and packers are willing to chase the market to get the higher quality-grading animals.”

Wholesale beef values on Friday were about even with the previous week leading up to Memorial Day: $245.24 for Choice boxed beef cutout; $218.06 for Select.

Reflecting on current market strength and producers with calves to market, Griffith says, “There is no guarantee prices will remain this strong, but there is also no information suggesting prices should decline.”

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities

Steers and heifers sold mostly steady to $6/cwt. higher, with instances of $7-$10 higher according to the Agricultural Marketing Service (AMS). There were also instances of $1-$3 lower on feeders.

“Feeder demand saw an increase as farmer feeders are still looking for good quality cattle to put on feed,” AMS analysts said. “Many farmers could attend the sales as they either completed their planting or are experiencing a standstill due to heavy rain late last week and throughout the weekend…Sale barns in the Northern Plains and Midwest switched to their summer schedules with sales running every other week or closed throughout the season.”

For the week, cash fed cattle trade was mostly $1-$3 lower at $132.00-$132.50/cwt.

“The feeder market continues to thrive despite slaughter cattle losing ground on Wednesday in direct feedlot trade. The momentum from the previous week’s positive advances continued to lend support and add confidence in the minds of feeder buyers,” AMS analysts explain.

The monthly Cattle on Feed report issued Friday—showing at least 4% more April placements than expected—may challenge that confidence.

Friday to Friday Change*

Weekly Auction Receipts

CME Feeder Index

*Thursday-to Thursday for CME Feeder Index

Cash Stocker and Feeder

North Central

South Central

Southeast

(AMS National Weekly Feeder & Stocker Cattle Summary)

Wholesale Beef Value

Futures

Equities