Negotiated cash fed cattle trade was slow to moderate on moderate demand in Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service (AMS). Live prices were $1-$2 lower than last week at $105/cwt. Dressed prices were $3 lower at $165.
There were a few early sales in the western Corn Belt at $105 live and at $165 in the beef, but too few to trend. Prices last week were at $104-$105 and $168, respectively.
Trade was at a standstill in the Southern Plains. Prices there last week were at $108.
However, slaughter steers at the Sioux Falls Regional auction in South Dakota sold $3-$5 higher; $2-$4 higher for fat heifers. There were 185 Choice 2-3 steers weighing an average of 1,469 lbs. bringing an average of $107.13.
Cattle futures closed higher Wednesday, perhaps helped along by positioning ahead of Friday’s monthly Cattle on Feed report.
Live Cattle futures closed an average of 61¢ higher, from 17¢ higher in spot Dec to 90¢ higher.
Feeder Cattle futures closed an average of 84¢ higher.
Choice Boxed beef cutout value was $1.60 lower Wednesday afternoon at $207.22/cwt. Select was 11¢ lower at $192.09.
Corn futures closed mostly 1¢ higher. ,
Soybean futures closed fractionally lower through Aug ‘21 and then mostly 4¢ to 5¢ lower.
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Major U.S. financial indices closed mixed Wednesday. Support included apparent progress toward another round of federal economic stimulus. On the negative side, U.S. retail and food services sales in November were 1.1% less than the previous month, according to the U.S. Commerce Department. That was a steeper decline than the trade expected.
The Dow Jones Industrial Average closed 44 points lower. The S&P 500 closed 6 points higher. The NASDAQ was up 63 points.
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Although feeder steer prices (750-800 lbs.) improved month to month in November, analysts with USDA’s Economic Research Service point out they 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. “The feeder steer price forecast for fourth-quarter 2020 was unchanged at $137/cwt.”
ERS also left forecast feeder prices (basis Oklahoma City) unchanged for next year at $133 in the first quarter, $136 in the second quarter, $141 in the third quarter and $138 for the annual average.
On the other side of the equation, the average five-area direct fed steer price the first week of December was 8% less than the same week a year earlier at $109.75/cwt. on a live basis, according to ERS—the lowest December starting price since 2010.
Consequently, ERS projected the average fourth-quarter price $1 lower at $108. However, they forecast next year’s average price $1 higher at $115. ERS forecast the second-quarter price $3 higher based on expectations of fewer cattle available for slaughter.
Specifically, fed steer prices are forecast to be $113 in the first and second quarters and $114 in the third quarter.
ERS also notes higher anticipated feed costs in 2021.
“The corn price estimate for the 2019-20 marketing year is $3.56/bu.; the 2020-21 forecast is $4.00, unchanged from last month’s forecast,” ERS analysts explain. “The soybean meal price estimate for the 2019-20 marketing year is $299.50/short ton. The 2020-21 forecast for soybean meal has been raised to $370/short ton, $15 higher than the last forecast. The alfalfa hay price in October was $171/ short ton, unchanged from September but $6 lower than October 2019. The five-state weighted average price for premium alfalfa hay in October was $194/ short ton, $2 higher than September but $11 lower than October 2019.”