Cattle Current Daily—May 15, 2019

Cattle Current Daily—May 15, 2019

Stronger outside markets and a sharp reversal higher in Lean Hog futures provided support to Cattle futures early Tuesday, but surging grain prices took away gains by the close.

Live Cattle futures closed an average of 46¢ lower.

Other than 95¢ higher in spot May, Feeder Cattle futures closed an average of 93¢ lower.

Wholesale beef values were lower on Choice and firm on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.46 lower Tuesday afternoon at $220.12/cwt. Select was 8¢ higher at $208.97.

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Grain futures bounced higher on Tuesday, getting a boost from the most recent USDA Crop Progress report confirming the degree of late planting.

For instance, just 30% of corn was planted, which was 36% less than the 5-year average. Only 9% of soybeans are in the ground, compared to 29% for the average.

Corn futures closed 11¢ to 13¢ higher through Dec ’20, 6¢ to 9¢ higher in the next three contracts and then mostly 2¢ to 3¢ higher.

Soybean futures closed mostly 23¢ to 29¢ higher.

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Major U.S. financial indices rebounded Tuesday, gaining back about a third of the sizable losses from the previous session, which was tied to China’s retaliation to additional tariffs levied by the U.S. late last week. Nothing changed on that front.

The Dow Jones Industrial Average closed 207 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 87 points.

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“Calf and stocker prices have dropped significantly after peaking in April. While good moisture conditions imply good forage prospects this summer, cooler than normal weather has delayed pasture growth,” says Derrell Peel, extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Calf prices generally decline from first-quarter peaks to seasonal lows in the fall. Heavy feeder cattle prices, which seasonally grind higher from now until late summer, have also dropped recently. I suspect this is largely due to delayed feedlot marketings resulting from earlier winter weather combined with continuing wet, sloppy feedlot conditions. Heavy feeder prices will likely get back on seasonal track as feedlots catch up from earlier delays and feedlot pen conditions improve in the next few weeks.”

Likewise, Peel suggests fed cattle prices are likely past the seasonal peak of $128/cwt. in March and April. He notes last week’s price of about $120 is the lowest since last December, with delayed support from summer grilling demand, due to the protracted cold, damp weather.

 

“Boxed beef cutout values will likely strengthen again with July 4 buying commencing in middle to late May. Warmer summer weather should also boost beef demand seasonally in the coming weeks,” Peel says. “While end meat prices are typically weaker in the summer, current weakness, especially for chuck products may additionally reflect weaker export demand so far in 2019.” 

2019-05-14T18:04:18-05:00

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