The 5-area direct average steer price last week was $118.21/cwt. on a live basis, which was $2.25 higher than the previous week. The average dressed price of $186.83 was $3.24 higher. Total volume of just 51,310 head, pressured by both the holiday and winter storms suggests packers need to be in a buying mood this week.
Cattle futures began the week narrowly mixed, amid relatively light trade, with little urgency one direction or the other.
Except for unchanged and 5¢ higher in the middle of the board, Live Cattle futures closed an average of 23¢ lower.
Except for unchanged to 12¢ lower in the front three contracts, Feeder Cattle futures closed an average of 40¢ higher.
Wholesale beef values were firm on Choice and sharply higher on Select with moderate to good demand and light to moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 49¢ higher Monday afternoon at $232.61/cwt. Select was $2.64 higher at $212.98.
Corn futures closed mostly unchanged to fractionally higher.
Soybean futures closed 2¢ to 6¢ lower through Nov ’20 and then most fractionally lower.
Major U.S. financial indices closed lower Monday, pressured by weak manufacturing data and ongoing uncertainty surrounding a U.S.-China trade deal.
Economic activity in the manufacturing sector declined in November, according to the closely watched Purchasing Managers Index® from the Institute for Supply Management® (ISM). Month to month, it declined two percentage points in November to 48.1%
“Global trade remains the most significant cross-industry issue. Among the six big industry sectors, Food, Beverage and Tobacco Products remains the strongest, while Fabricated Metal Products is the weakest. Overall, sentiment this month is neutral regarding near-term growth,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.
The Dow Jones Industrial Average closed 268 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 97 points.
Although recent winter storms may not be widespread enough to cause noticeable fed cattle market reactions, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says they may delay cattle finishing and disrupt slaughter flows in some regions.
In his weekly market comments, Peel explains the storms may also ensure the seasonal peak is in for carcass weights.
“Steer and heifer carcass weights pushed above year-ago levels the past few weeks with the latest steer carcass weights at 912 lbs. compared to 900 lbs. last year and heifer carcasses at 841 lbs., up from 836 lbs. one year ago on the same date. However, for the year to date, steer carcass weights are down 3.3 lbs. and heifer carcasses are down 4.4 lbs. An early storm like this may set the stage for a long period of feedlot production challenges with impacts persisting and accumulating through the winter.”
Of course, widespread severe weather also can impact demand.
“Winter storms may disrupt transportation and the flow of perishable products to markets,” Peel says. “Though people continue to eat during storms, travel and business disruptions often reduce restaurant traffic and power disruptions may reduce meat demand as consumers hunker down and get through the storm with minimal cooking and more use of prepared and ready-to-eat products.”