Cattle Current Daily—Dec. 18, 2019

Cattle Current Daily—Dec. 18, 2019

Negotiated cash fed cattle trade remained undeveloped through Tuesday afternoon.

Feeder Cattle futures mostly edged higher and Live Cattle mostly wandered lower.

Live Cattle futures closed an average of 38¢ lower (5¢ to 95¢ lower) to an average of 7¢ higher.

Feeder Cattle futures closed an average of 14¢ higher, except for 10¢ and 27¢ lower on either end of the board.

Wholesale beef values were sharply lower on light demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $4.27 lower Tuesday afternoon at $212.81/cwt. Select was $2.04 lower at $203.47.

Corn futures closed mostly 1¢ higher through Jly ‘21; and then fractionally lower to 1¢ lower.

Soybean futures closed mostly 3¢ to 4¢ higher through Jan. ’21 and then mostly 1¢ higher.

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Major U.S. financial indices crept higher Tuesday. Support included more new housing starts than expected.

Total housing starts increased 3.2% in November to a seasonally adjusted annual rate of 1.37 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department.

The November reading of 1.37 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months, according to the National Association of Home Builders (NAHB). Within this overall number, single-family starts increased 2.4% to a 938,000 seasonally adjusted annual rate off downwardly revised estimates for recent months.

“Market conditions for single-family starts are positive, given a lack of resale inventory, low interest rates and a solid job market,” says Greg Ugalde, NAHB chairman and a home builder and developer from Torrington, Conn. “Builder confidence points to additional gains as we look forward.”

The Dow Jones Industrial Average closed 31 points higher. The S&P 500 closed 1 point higher. The NASDAQ was up 9 points.

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“Despite wholesale prices declining from abnormally high levels in mid November, packers continue to pay higher prices to bid cattle out of the feedlots,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “Greater fed cattle slaughter may in part reflect the packers’ inclination to capture stronger than typical margins as wholesale boxed beef prices averaged well above 2018 during November and into early December. Feedlots also have a higher proportion of cattle on feed over 150 days, and the narrowing of the Choice-Select spread may also be providing incentives to bring additional cattle to market.”

USDA recently increased its projected fourth-quarter fed steer price by $2 to $114/cwt. Forecast prices for the first two quarters of next year were raised to $122 and $118, respectively.

In turn, ERS also increased projected prices for feeder cattle (basis Oklahoma City).

Based on recent price data, the fourth-quarter 2019 feeder steer price was raised by $3 to $147/cwt. The 2020 annual price forecast for feeder steers was raised by $2 to $144.

Quarterly feeder steers prices for 2020 are projected at: $140 in the first quarter, $142 in the second quarter and $147 in the third quarter.

As for cull cows, ERS analysts point out the average price for the week ending Dec. 6 was $53.76/cwt., which was 16% higher than a year earlier. “This, coupled with tight forage supplies for some producers, is likely encouraging a higher culling rate.” Beef cow slaughter continues well above last year’s pace.

2019-12-17T20:31:12-06:00

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