Negotiated cash fed cattle trade ended the week steady to $1 higher on a live basis at $120/cwt. in the Southern Plains and $119-$120 in the north. Dressed trade was steady at $190.
Weaker outside markets and ample supplies continued to pressure Cattle futures Friday, although they closed off of session lows.
Live Cattle futures closed an average of 40¢ lower, amid active trade.
Feeder Cattle futures closed an average of $1.03 lower (42¢ to $1.37 lower).
Wholesale beef values were firm on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 59¢ higher Friday afternoon at $205.09/cwt. Select was 10¢ higher at $201.70.
USDA projections shared at last week’s 2020 Agricultural Outlook Forum are plumb bullish for corn production this year with expectations for 94.0 million corn acres, which would be about 5 million more than last year.
“The U.S. corn outlook for 2020-21 is for record production and domestic use, increased exports, and higher ending stocks,” according to USDA’s Grains and Oilseeds Outlook. “The corn crop is projected at 15.5 billion bu., 13% above a year ago with an increase in area from last year’s weather-reduced plantings and a return to trend yields. The yield projection of 178.5 bu./acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. Despite beginning stocks forecast down from a year ago,
total corn supplies at 17.4 billion bu. are forecast to be record high.”
“One of the major concerns heading into planting season is if the soil, and infrastructure can handle this year’s snow melt,” say analysts with the Livestock marketing Information Center (LMIC), in the latest Livestock Monitor. “From the Mississippi Delta through the upper Midwest and Missouri river basin, hydrological conditions are currently showing heavy saturation levels. Additionally, un-harvested acres in North Dakota and South Dakota could become problematic for spring planting.”
Moreover, LMIC analysts say there appears to be a mismatch between futures prices and the level of plantings USDA is suggesting.
“Even though greater numbers of swine and poultry are expected in 2020, corn export demand has been dismal so far in the 2019-20 marketing year,” LMIC analysts say. “The risk of recession and spread of coronavirus all point to potentially shaky demand moving forward this year. Already, the 2019-20 crop is approaching a 2 billion bu. carryout because of the lack of export demand. That could weigh on corn prices and will likely allow soybeans to bid acres away from corn.”
Corn futures closed fractionally lower to 2¢ lower.
Soybean futures closed mostly 2¢ to 3¢ lower.
Major U.S. financial indices closed strongly lower Friday as fears about novel coronavirus picked up steam again with reports from China suggesting a deep economic toll in that country.
The Dow Jones Industrial Average closed 222 points lower. The S&P 500 closed 35 points lower. The NASDAQ was down 174 points.
Feedlots placed fewer cattle year over year in January, according to the monthly USDA Cattle on Feed report released Friday. The report is for feedlots with 1,000 head or more capacity.
Cattle feeders placed 1.96 million head in January, which was 0.61% less (-12,000 head) than the previous year. Ahead of the report, estimates were for placements to be up about 2%.
In terms of placement weights, 43.22% went on feed weighing 699 lbs. or less, 47.82% weighed 700-899 lbs. and 8.95% weighed 900 lbs. or more.
Marketings in January of 1.93 million head were 1.10% more (+21,000 head) than a year earlier.
Cattle on feed Feb. 1 of 11.93 million head were 2.16% (+252,000 head) more than a year earlier.
Both marketings and the on-feed inventory were close to pre-report estimates.
Cattle and calves on feed for slaughter in the United States, for feedlots with capacity of 1,000 or more head, represented 81.5% of all cattle and calves on feed in the United States Jan. 1, 2020, according to USDA’s National agricultural Statistics Service (NASS). That’s comparable to 81.3% a year earlier.
Further, NASS analysts say feedlots with capacity of 1,000 or more head during 2019 represented 87.0% of total cattle marketed from all feedlots in the United States, down slightly from 87.1% during 2018.