Negotiated cash fed cattle trade was $2 lower at $106/cwt. on a live basis in the Southern Plains through Monday afternoon on light demand, according to the Agricultural Marketing Service (AMS). There were a few live sales in Nebraska $3 lower at $105, but too few to trend.
Prices last week:
Southern Plains: $108 on a live basis.
Nebraska: mostly $108 live and at $169 in the beef.
Western Corn Belt: $105-$107 on a live basis and $167-$168 dressed.
Last week’s five-area direct fed steer prices was 74¢ less than the previous week at $107.52/cwt. on a live basis, according to AMS. The average price in the beef of $168.35 was $1.32 lower.
Cattle futures closed sharply lower Monday, with follow-through pressure from the last session, softer outside markets, declining open interest and what appeared to be algorithmic piling on. Recently expanded CME limits offered extra rein.
Live Cattle futures closed an average of $2.90 lower.
Feeder Cattle futures closed an average of $3.67 lower.
Choice boxed beef cutout value was 29¢ lower Monday afternoon at $209.74/cwt. Select was $1.68 lower at $191.84.
Corn futures closed mostly 1¢ to 3¢ higher.
Soybean futures closed mostly 3¢ to 4¢ higher across the front half of the board and then mostly fractionally higher to 1¢ higher.
Major U.S. financial indices dropped Monday, beneath the weight of increasing coronavirus cases and continued uncertainty about the government’s ability to come to terms on another round of economic stimulus.
The Dow Jones Industrial Average closed 410 points lower. The S&P 500 closed 56 points lower. The NASDAQ was down 192 points.
“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—diminished for the third consecutive month,” according to analysts with USDA’s Economic Research Service, in the monthly Livestock, Dairy and Poultry Outlook. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last two months and above the five-year average. The improving pace, combined with an ample supply of fed cattle at heavier weights, has led to higher expected beef production in third-quarter 2020, relative to 2019. Nonetheless, firm demand and higher than year-ago wholesale prices are likely supporting packer margins, as the recent uptick in steer prices remains in line with year-ago prices.”
ERS increased the expected five-area direct fed steer price for the fourth quarter by $5 to $109/cwt. Projections for the first quarter next year increased by $6 to $113; by $3 to $110 in the fourth quarter.
As for feeder steers (basis Oklahoma City), ERS increased expectations for the fourth quarter by $3 to $143. The annual average price for next year increased by $2 to $139.