Cattle Current Daily—Oct. 6, 2020

Cattle Current Daily—Oct. 6, 2020

Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Monday afternoon, according to the Agricultural Marketing Service. Elsewhere, it was mostly inactive on very light demand.

Live sales last week were at mostly $107/cwt. in the five-area feeding regions. Dressed prices were at $168 in Nebraska and at $167-$168 in the western Corn Belt.

The average five-area direct steer price was last week was $107.12/cwt. on a live basis, which was $2.07 higher than the previous week. The average price in the beef was $2.81 higher at $167.70.

Cattle futures firmed with last week’s stronger cash prices, as well as an increase in slaughter.

Live Cattle futures closed up an average 42¢ higher.

Feeder Cattle futures closed an average 47¢ higher (5¢ to 85¢ higher).

Choice boxed beef cutout value was $1.90 lower Monday afternoon at $216.98/cwt. Select was 40¢ higher at $208.01.

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Major U.S. financial rallied Monday. Most attributed the lift to President Trump able to leave the hospital and renewed hopes for another round of federal economic stimulus.

The Dow Jones Industrial Average closed 465 points higher. The S&P 500 closed 60 points higher. The NASDAQ was up 257 points.

CME WTI Crude Oil futures also rallied on the day, up $2.06 to $2.17 through the front six contracts.

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“The current feeder price patterns mean that producers should consider the implications of current animal weight, short-term weight gain and timing as they evaluate fall marketing alternatives,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. For example, he explains, in his weekly market comments, “In the current market, the value of 50 to 100 lbs. of gain will be significantly lower for steers less than 600 lbs. compared to steers over 600 lbs.”

Peel is referring to Oklahoma price patterns, specifically, which he says are developing along typical lines.

“The price slides across steer weights are very different for feeder cattle below 600 lbs. compared to cattle over 600 lbs. A larger price slide for the lightweight cattle means that the value of gain is lower,” Peel explains.

By way of illustration, using current combined Oklahoma auction prices, he calculated the value of gain at 60¢/lb. to add 50 lbs. to a steer weighing 500 lbs., versus $1.37 for adding the same weight to a steer weighing 600 lbs.

In the meantime, Peel points out La Niña conditions, expanding drought in the Southern Plains and the impact on wheat pasture could pressure stocker cattle prices this fall.

“On average, Oklahoma calf prices are at or near the seasonal low in the late September/early October period. With larger fall runs of calves expected in October and November, the lack of wheat pasture demand may add additional seasonal pressure to calf markets this fall.

Moreover, he says the lack of wheat pasture and other forages may change the timing of calf and feeder cattle sales this fall. 

2020-10-06T09:48:36-05:00

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