Cattle Current Daily—Nov. 21, 2019

Cattle Current Daily—Nov. 21, 2019

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday at $116/cwt., which was $1 higher than last week.

That matched optimism in the weekly Fed Cattle Exchange Auction, where 1,229 head—three lots each from Kansas and Nebraska—sold out of 1,398 head: 283 head for a weighted average price of $116/cwt. (delivery at 1-9 days) and 946 head for a weighted average price of $115.44 (delivery at 1-17 days). One other lot of Texas heifers was passed at $114.50 for delivery at 1-9 days.

Although too few to trend, there were also some early sales in Nebraska Wednesday at $114-$116 and some in the beef at $184, which was $2 higher than the previous week. Early live sales in the western Corn Belt were steady to $2 higher at $115-$117.

Cattle futures were mixed Wednesday, mainly higher toward the front of the board for Live Cattle, but lower for Feeder Cattle, perhaps with defensive positioning ahead of Friday’s Cattle on Feed report (see below).

Live Cattle futures closed narrowly mixed from an average of 27¢ lower to an average of 21¢ higher.

After unchanged and 5¢ higher in the front two contracts, Feeder Cattle futures closed an average of 41¢ lower.

Wholesale beef values were weak to lower on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 80¢ lower Wednesday afternoon at $238.21/cwt. Select was 70¢ lower at $214.77.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed 1¢ to 6¢ lower through Nov ’20 and then 1¢ to 2¢ higher.

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Major U.S. financial indices closed lower Wednesday. Despite strong earnings from retailers like Lowe’s and Target, pressure came on chatter that the first phase of the U.S.-China trade deal might not get signed this year.

The Dow Jones Industrial Average closed 112 points lower. The S&P 500 closed 11 points lower. The NASDAQ was down 49 points.

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Pre-report estimates of feedlot placements in October are canyon-wide, which could jolt markets one way or the other, after the monthly Cattle on Feed report comes out Friday.

Allendale Inc. projects October placements at 2.163 million head, which would be 3.8% less than the previous year and the least for the month in seven years.

On the other hand, the average estimate of analysts surveyed by Urner Barry, and reported by the Daily Livestock Report, is for placements to be up 12.2%.

There are a number of factors likely driving such diverse views.

Apparent improvement in feedlot margins, reports of poor wheat pasture conditions, delayed calf marketing—due to low prices and market uncertainty and made possible by positive forage conditions—support the notion of higher placements. 

Conversely, lower placements could be driven, in part, by the current value of gain for growing cattle outside the feedyard, reduced imports of feeder cattle, as well as growing chatter that there may be fewer cattle than previously thought. 

Both of the aforementioned groups estimate October marketings to be slightly less than the previous year.

Allendale estimates total cattle on feed Nov. 1, for feedlots with 1,000 head or more capacity to be 11.484 million head, which would be 1.8% less than the previous year. However, given the significantly higher placements anticipated by those in the Urner Barry survey, they estimate a year-over-year on-feed increase of 1.3%.

2019-11-20T19:26:39-06:00

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