Cattle Current Daily—July 31, 2019

Cattle Current Daily—July 31, 2019

Follow-through pressure on Lean Hog futures pressured Live Cattle futures once again on Tuesday. Other than 35¢ higher at the back, Live Cattle futures closed an average of 31¢ lower.

Conversely, lower grain futures boosted Feeder Cattle. Feeder Cattle futures closed an average of 88¢ higher, across a range of 52¢ to $1.30 higher.

Wholesale beef values were higher on Tuesday, with good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Tuesday afternoon at $214.03/cwt. Select was $1.37 higher at $191.13.

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Despite crop development lagging significantly behind the average, Corn futures closed mostly 5¢ to 6¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 7¢ lower through Mar ’20 and then mostly 2¢ to 4¢ lower.

According to the most recent Crop Progress report, for the week ending July 28, only 58% of corn was silking, which was 42% less than last year and 25% less than average. 13% was at the dough stage, compared to 35% last year and 23% for average. 58% was in Good or Excellent condition, which was 14% less than last year.

Similarly, 57% of soybeans were blooming, which was 28% less than the previous year and 22% less than average. 21% were setting pods, which was 37% less than last year and 24% less than a year earlier. 54% were rated in Good or Excellent condition, compared to 70% a year earlier.

By the way, forage conditions continue strongly positive compared to last year, with

64% of the nation’s pasture and range was rated in Good or Excellent condition, compared to 41% last year. 10% was rated as Poor or Very Poor, compared to 29% a year earlier. States with 20% or more rated as Poor or Very Poor include: AZ (35%); CA (40%); NM (39%); OR (23%); WA (22%).

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Major U.S. financial indices edged lower Tuesday, despite another round of positive quarterly earnings reports from heavyweights such as Proctor & Gamble and Merck. Pressure came from comments made by President Trump, which some investors, apparently, feared would stall trade negotiations with China.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 19 points.

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“If feedstuff costs do not skyrocket, cattle feeders are expected to generally breakeven or post small profits late this year,” say analysts with the Livestock Marketing Information Center (LMIC). “In the situation where corn cost is already locked-in, November breakeven sales price is in the range of $105.50-106.50/cwt. per cwt., and $111-112 for December.”

LMIC calculated the June closeout at -$60.66 for steers placed on feed in a Southern Plains feedlot weighing 750 lbs.

For the same month, Iowa State University (ISU) calculated a loss of $39.71 per head for yearling-placed cattle; -$100.61 for calf-feds closed out in June. Both of the calculations include a manure credit.

“Neither the LMIC nor ISU estimates are survey-based, but they do provide indications of the direction of change,” say LMIC analysts, in the latest Livestock Monitor. “Of course, in late 2018 and the first several months of 2019 many cattle feeders had much worse results than these calculations, which are based on normal weather. Very muddy feedlot conditions resulted in red ink for many cattle feeders. The baseline production systems and assumptions for the LMIC and ISU are different. Besides using different prices and costs, ISU incorporates, for example, Modified Distillers Grains in the ration, which is a common feedstuff there.”

2019-07-30T18:44:20-06:00

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