The late-week surge in Cattle futures ultimately helped negotiated cash fed cattle prices take a strong step higher. Live sales were mainly $3-$4 higher at $110.00-$111.50/cwt. Dressed trade was $2-$5 higher at $172-$175.
Cattle futures mostly held on to Friday’s strong gains, closing narrowly mixed to mostly a touch higher.
Live Cattle futures closed narrowly mixed (37¢ lower to 40¢ higher), with the most open interest since July.
After 10¢ higher in spot Sep, Feeder Cattle futures closed an average of 46¢ higher, except for unchanged to 37¢ lower in the back three contracts.
Wholesale beef values were higher on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.77 higher Monday afternoon at $206.04/cwt. Select was 91¢ higher at $197.38.
*******************************
Major U.S. financial indices closed lower Monday, with most of the pressure attributed to sliding tech shares, tied to more sabre rattling about trade between the U.S. and China.
The Dow Jones Industrial Average closed 92 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 114 points.
*******************************
“There is still a likelihood that calf prices will hold steady or decline some into October, but the seasonal pressure may be muted with strong stocker demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The market appears to be developing a typical fall market pattern for mid-weight steers with a sharp break on prices from 475 to 525 lbs. and prices relatively flat for steers weighing 525-700 lbs. Heifer calf prices continued a modest seasonal decline last week. Stocker producers should evaluate a range of possible purchase weights and look at steers versus heifers to determine the best purchase opportunity.”
With recent moisture, Peel says there’s plenty of chatter about wheat grazing prospects this winter.
“Budgets for winter grazing appear to pencil out quite attractively at this point. Feeder futures have remained remarkably strong, with March feeder futures trading near $153/cwt. at the end of last week,” Peel explains. “With normal basis, these contract levels offer an opportunity to price spring cattle above projected break-evens for winter grazing. However, this may be a fleeting opportunity as there several factors that might drive a futures market correction. One is that current feeder price levels result in negative projected feedlot margins in coming months. The reality is that feeder cattle supplies are still plentiful and the September Cattle on Feed report, due out September 21, could indicate a large feedlot placement level with implications for spring feeder markets.”
Running the numbers for Oklahoma, Peel says, given expected wheat price, along with fertilizer and seed cost, the projected cost of wheat pasture (above other wheat production costs) is estimated at near $70/acre.
“The cost per pound of gain depends on cattle average daily gain, number of days of grazing and wheat pasture stocking rate. Across a range of these assumptions, wheat pasture breakeven cost calculates out to a range from 30¢ to 45¢/lb. gain for winter grazing,” Peel says.