Cattle Current Daily—Aug. 11, 2020

Cattle Current Daily—Aug. 11, 2020

The weekly five-area weighted average steer price last week was $101.34/cwt. on a live basis, which was $2.68 more than the previous week. The average dressed steer price was $163.20, which was $3.17 higher.

Stronger cash fed cattle prices and firmer wholesale beef values helped Cattle futures gain a little ground Monday.

Live Cattle futures closed an average of 67¢ higher.

Feeder Cattle futures closed an average of 32¢ higher (2¢ to 85¢ higher).

Choice boxed beef cutout value was $1.73 higher Monday afternoon at $207.20/cwt. Select was $1.18 higher at $193.93.

Corn futures closed 1¢ to 2¢ higher.            

Soybean futures closed mostly 3¢ to 4¢ higher.

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Major U.S. financial indices closed mixed on Monday, pressured by profit taking in tech stocks, but buoyed by Executive Order from president Trump that would extend some of the recently-ended coronavirus aid to the unemployed.

The Dow Jones Industrial Average closed 357 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 42 points lower.

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Cattle feeding returns appear to be more promising for the fourth quarter, but plenty of uncertainty remains, according to the Livestock Marketing Information Center (LMIC).

On the up side, LMIC analysts point to lower projected breakeven levels and more optimistic Live Cattle futures for the fourth quarter. LMIC projections for fed cattle prices are in line with the recent futures prices, if not slightly more optimistic for December and into 2020.

In the meantime, LMIC projects cattle feeding returns to continue in the red. The organization estimated losses for cattle marketed in July at about $200 per head, the fifth consecutive month of red ink.

For perspective, LMIC estimates assume feeding out a 750-lb. steer in a commercial Southern Plains feedlot and include all costs of production. The estimates are not survey-based and presume normal weather conditions. Cash prices are used; neither fed cattle prices nor feedstuff costs are hedged. Estimates assume a normal marketing window, based on a standard cost of gain.

“Fed cattle prices in Kansas averaged $95.23/cwt. in July, leaving only $200-$300 to cover variable costs during the feeding timeframe per animal,” explain LMIC analysts. “For most feedlots, regardless of feeding 120 days or 180 days, it was not enough to cover costs. KSU feedlot data suggests that the cost of gain was about $500 per head in May to feed a steer to slaughter weight…September marketed cattle face a lower breakeven, which in early August indicated a net return very close to $0 per head.”

With expected lower feed costs, fed cattle prices remain the primary risk, according to LMIC.

2020-08-10T19:29:44-05:00

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