Cattle Current Daily—Nov. 10, 2020

Cattle Current Daily—Nov. 10, 2020

Negotiated cash fed cattle prices last week were $1 higher than the previous week in the Southern Plains at $107/cwt. on a live basis, $4-$6 higher in Nebraska at $107/cwt., and $3-$4 higher in the western Corn Belt at $105-$106. Dressed trade was $2-$9 higher at mostly $167, according to the Agricultural Marketing Service.

Last week’s five-area weighted average fed steer price was $106.33/cwt. on a live basis, which was $1.26 higher than the previous week, but $8.27 less than the same time a year earlier. The average steer price in the beef was $165.35, which was $1.40 more than the prior week, but $15.69 less than the previous year.

Cattle futures roared higher Monday, buoyed by significant gains in wholesale beef prices and last week’s stronger cash fed cattle prices. There was also likely plenty of help from surging outside markets, tied to the reported efficacy of a coronavirus vaccine (more below).

Live Cattle futures closed an average of $2.19 higher, from $1.20 higher toward the back to $3.17 higher in spot Dec.

Feeder Cattle futures closed an average of $3.71 higher, from $1.90 higher at the back to $4.80 higher.

Choice boxed beef cutout value was $3.07 higher Monday afternoon at $217.39/cwt. Select was $3.88 higher at $202.37. Week to week, Choice was $8.74 higher and Select was up $9.75. 

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed 6¢ to 9¢ higher through Aug ‘21, and then mostly from 1¢ lower to 1¢ higher.

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Except for tech stocks, major U.S. financial indices rallied Monday on news that a vaccine candidate from Pfizer and BioNTech proved to be more than 90% effective in preventing COVID-19.

Specifically, according to those companies, the vaccine candidate,  “…was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.”

The companies continue accumulating safety data and currently estimate that a median of two months of safety data following the second (and final) dose of the vaccine candidate—the amount of safety data specified by the FDA in its guidance for potential Emergency Use Authorization—will be available by the third week of November. Based on current projections those companies expect to produce globally up to 50 million vaccine doses this year and up to 1.3 billion doses in 2021.

The Dow Jones Industrial closed 834 points higher. The S&P 500 closed 41 points higher. The NASDAQ down 181 points.

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Calf and feeder markets appear to be moving higher in the Southern Plains with wheat pasture prospects improved by recent moisture.

For instance, in Oklahoma, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says prices last week for steers weighing 450-600 lbs. were the highest since late August and early September. As an example, he notes the combined state auction price for Medium and Large #1 steers at 450-500 lbs. last week was $166.89/cwt. compared to $147.34 a week earlier, when storm severity helped damper markets.

Peel provided a price chart (below) in his weekly market comments published Monday.

“For animals below 600 lbs., the price drops sharply with additional weight (i.e. a bigger price rollback). Above 600 lbs., the price changes little with additional weight. A bigger price rollback reduces the value of gain. For example, the value of gain for 200 lbs. of gain from 450 to 650 lbs. is $0.62/lb. but for 650 to 850 lbs., the value of gain is $1.36/lb.,” Peel explains. 

Consequently, Peel says stocker producers should consider several factors, including beginning weight, how long the animals will be owned and how much gain will be added to the animals.

“With a possibly shortened winter grazing period, a heavier beginning weight currently offers a higher value of gain and may make sense,” Peel says. “The next few weeks may result in additional demand for stockers but will likely also see larger supplies of feeder cattle in Oklahoma auctions. Combined Oklahoma auction volume the past six weeks was down nearly 33%, in part due to the impacts of the winter storm. It appears there are significant numbers of calves and feeders yet to be marketed this fall. Stocker and feeder prices could move either higher or lower in the next month depending on the balance of increased demand and increased supply in auctions.”

Peel adds that the recent surge in Feeder Cattle futures is adding support to calf and feeder cattle prices.

“Winter grazing typically keys off the March Feeder futures contract,” he says. “March contract prices increased to over $135/cwt. at the end of last week, up from lows below $126/cwt. less than two weeks ago. Feeder markets are also closely watching feed grain markets as strong export demand has pushed grain prices higher.”

2020-11-09T21:50:49-06:00

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