Week to week on Monday, the 5-area direct average steer price was $120.36/cwt. on a live basis, which was $1.19 higher than the previous week. In the beef, the average steer price was $3.85 higher at $191.85.
More placements than expected in Friday’s monthly Cattle on Feed report (see below) pressured Cattle futures to start the week; that and sluggish holiday trade.
Live Cattle futures closed narrowly mixed but mostly lower, from 35¢ lower to 17¢ higher.
Feeder Cattle futures closed an average of 52¢ lower.
Wholesale beef values were higher to sharply higher on light to moderate demand and light offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.87 higher Monday afternoon at $211.57/cwt. Select was $3.61 higher at $204.64. The Choice-Select spread was the narrowest since March at $6.93.
Corn futures closed fractionally higher to 1¢ higher.
Soybean futures closed mostly 2¢ to 4¢ higher through Jly ’21 and then mostly 1¢ lower.
Major U.S. financial indices closed higher Monday, supported by reports that China will implement reduced temporary import tariffs on a range of U.S. goods, including frozen pork. Apparently, the announcement has to do with sagging economic growth in that country, rather than the recently announced phase-one trade agreement between the two nations.
The Dow Jones Industrial Average closed 96 points higher. The S&P 500 closed 2 points higher. The NASDAQ was up 20 points.
“Higher placements the last three months have rebuilt feedlot inventories going into 2020,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Feedlots will be a bit front loaded in the first quarter of the new year and marketings are expected strong against the April Live Cattle futures contract. Of course, weather often impacts cattle performance and the timing of feedlot production this time of the year and may affect feedlot marketings through the winter.”
According to Friday’s monthly Cattle on Feed report, November placements in feedlots with 1,000 head or more capacity were 2.09 million head, which was 4.86% more than the prior year.
Peel notes placements weighing less than 600 lbs. were 12.7% more year over year, likely reflecting a delay in the fall calf run, combined with slow development of wheat pasture in the Southern Plains.
“Placements were sharply higher year over year in South Dakota (160%), Colorado (132%) and Oklahoma (112%),” Peel says. Placements in Texas were 3% higher; 4% higher in Iowa.
The 12.03 million head on feed inventory Dec. 1 were 2.49% more than a year earlier. According to Peel, the annual average feedlot inventory this year was 11.62 million head, the largest 12-month moving average since the current data series began in 1996.