Cattle markets head into the new week with a fair bit of uncertainty and plenty of questions tied to Thursday’s USDA reports. For instance the Prospective Plantings report—fewer corn and soybean acres than expected—boosted spot grain cash bids and futures prices significantly higher when it came out during trading hours on Thursday, despite sharply higher stocks. With futures and equity markets closed in observance of Good Friday, there was no chance to judge follow-through action. Likewise, the quarterly Hogs and Pigs report came out after futures trade on Thursday. It has the inventory of market hogs (66.7 million head) 3% higher than the previous year, though 1% less than the previous quarter.
The higher grain prices helped push Cattle futures sharply lower to end the week.
Live Cattle futures closed an average of $4.62 lower through the front five contracts week to week on Thursday and then an average of $2.42 lower. Analysts with the Agricultural Marketing Service point out the June contract closed the week at the lowest level since late April of last year.
Except for $1.92 lower in expiring March, Feeder Cattle futures closed an average of $4.40 lower week to week on Thursday; about $11 lower over the last three weeks.
Cash fed cattle trade for the week also added pressure. Live prices were $5 lower in the Southern Plains at $121/cwt.; $3-$4 lower in Nebraska at $120-$122. Dressed trade ended in Nebraska at $190, which was $10-$13 less than the previous week.
Choice boxed beef cutout value was 4¢ higher Friday afternoon at $221.04/cwt. Select was 99¢ lower at $208.69.
“Significant equity has vanished from the cattle complex in recent weeks as
feedlot managers trade a substantial amount of cattle out front for future
delivery in order to lock in a price ahead of calf-feds hitting the supply chain in late April to early May,” say analysts with the Agricultural Marketing Service (AMS). “…packers bought the second largest weekly total purchased for 15 to 30-day deliveries since the data series started in March of 2010.”
AMS analysts note that mild winter weather in the Southern Plains will likely contribute to the expected year-over-year increase in carcass weights.