Cattle Current Daily—Oct. 13, 2020

Cattle Current Daily—Oct. 13, 2020

Negotiated cash fed cattle trade was limited on very light demand in the Texas Panhandle and western Corn Belt through Monday afternoon. Although too few to trend, there were a few live sales in the Texas Panhandle at $109/cwt. and a few in the western Corn Belt at $107.

Last week’s five-area direct negotiated weighted average fed steer price was $107.12/cwt. on a live basis, which was $1.14 higher than the previous week, but 95¢ less than the same time last year. The average price in the beef of $169.67 was $1.97 more than the prior week but $2.10 less than the previous year.

Cattle futures dropped Monday, with follow through pressure from last week and perhaps some fund selling.

Live Cattle futures closed an average of $1.19 lower.

Feeder Cattle futures closed an average of 81¢ lower (35¢ to $1.00 lower), except for an average of 23¢ higher in three contracts.

Choice boxed beef cutout value was 56¢ higher Monday afternoon at $214.62/cwt. Select was 52¢ higher at $200.34.

Corn futures closed mostly 3¢ to 5¢ lower.

Soybean futures closed down 11¢ to 31¢ lower through Jan ’22 and then 1¢ to 6¢ lower.

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Major U.S. financial indices climbed higher Monday, led by big tech stocks and despite uncertainty regarding additional federal economic stimulus.

The Dow Jones Industrial Average closed 250 points higher. The S&P 500 closed 57 points higher. The NASDAQ was up 296 points.

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“The COVID impacts on the fed cattle market continue to almost have entirely run their course. Marketings have been reasonably strong. The number of long-fed cattle are down off their peaks in June and high inventories in the surrounding months of May and July,” says Stephen Koontz, agricultural economist at Colorado State University. 

In the latest issue of In the Cattle Markets, Koontz says fall feeder cattle prices could be among the highest of the year. While less than the recent peak of $150/cwt. in August, he points out current price levels of near $145 are significantly higher than the $120 seen in April.

“However, cash prices for 4-5-weight animals remain comparable to this spring. Prices are in the high $160s and that is similar to the mid-$160s of April and May,” Koontz says. “Basis for these lightweight animals is soft and the market is rather clearly communicating, for producers who can feed calves for another month or two, that delaying marketing should be considered.”

Although beef cow slaughter has yet to increase much, Koontz expects to see acceleration.

“Beef cow slaughter is up 2.7% for the year to date as of late September,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “At the end of the first quarter, cumulative beef cow slaughter was nearly 11% higher year over year. By the end of the second quarter, cumulative beef cow slaughter had decreased to roughly 3.5% higher than the previous year…Beef cow slaughter is projected to be roughly 2% above year ago levels in the fourth quarter, leading to an annual total beef cow slaughter roughly 2.5% higher year over year.”

2020-10-12T19:09:06-05:00

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