Cattle Current Daily—June 18, 2020

Cattle Current Daily—June 18, 2020

Negotiated cash fed cattle prices continued $2-$6 lower on a live basis Wednesday at $100-$102/cwt. in the Southern Plains, mostly $102 in Nebraska; $99-$102 in the western Corn Belt on Tuesday. Dressed trade was at $160-$162, which was $5-$10 lower in Nebraska and steady to $10 lower in the western Corn Belt.

Cattle feeders offered 1,220 head in the weekly Fed Cattle Exchange auction; none sold.

Choice steers and heifers sold $2.25-$2.50 lower at the fat auction in Tama, IA. There were 122 Choice 2-4 steers weighing an average of 1,378 lbs., bringing an average of $104.13/cwt.

Slaughter steers and heifers sold $3-$6 lower at Sioux Falls Regional in South Dakota. There were 498 Choice 3-4 steers weighing an average of 1,533 lbs. and bringing an average of $102.76.

Cattle futures mostly tread water Wednesday amid continued light trade.

Live Cattle futures closed an average of 22¢ higher, except for unchanged in Dec.

Except for 32¢ lower in the back two contracts, Feeder Cattle futures closed an average 36¢ higher. 

Choice boxed beef cutout value was $9.96 lower Wednesday afternoon at $217.93/cwt. Select was $5.09 lower at $208.08.

Corn futures closed mostly fractionally lower.

Soybean futures closed 3¢ to 4¢ higher. 

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Major U.S. financial indices lost recent steam Wednesday, with some likely profit taking and continued uncertainty about COVID-19.

The Dow Jones Industrial Average closed 170 points lower. The S&P 500 closed 11 points lower. The NASDAQ closed 14 points higher.

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“With higher anticipated fed cattle slaughter in 2020, feedlot marketings will increase. A faster pace of marketings and higher forecast fed cattle prices than last month will likely improve feedlot demand for feeder cattle,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook.

Based on recent price data, ERS increased the projected annual feeder steer price (basis Oklahoma City) by almost $7, compared to the previous month, to $131.40/cwt.

The projected second-quarter feeder steer price was raised by $5 to $126. Forecast price for the third quarter increased $9 to $132. The fourth-quarter price projection rose $13 to $131.

“In the second quarter, the capacity of beef packing plants to slaughter fed cattle was reduced by as much as 41%, which prompted lower prices for fed cattle. As beef production declined, wholesale beef prices skyrocketed, which greatly expanded packer margins. However, as packers’ capacity to slaughter began to rebound at the beginning of May, increasing demand for cattle, it likely increased their willingness to pay higher prices for cattle,” say ERS analysts.

The average five-area direct fed steer price in May was $111.53/cwt. on a live basis, which was more than 9% higher than in April, according to ERS. With that in mind, USDA increased its price forecast for fed steers in the second quarter by $3 to $104. Forecast prices for the third and fourth quarters increased by $6 to $105 and $106, respectively.

“Based on USDA, Agricultural Marketing Service estimated weekly slaughter for the week ending June 13, steer and heifer slaughter recovered to 4% below the same week a year ago, and cow and bull slaughter improved to 7% above the same week last year,” say ERS analysts.

2020-06-17T18:49:39-05:00

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