Cattle Current—Oct. 9, 2019

Cattle Current—Oct. 9, 2019

Cattle futures edged higher Tuesday, supported by the turnaround in Lean Hogs and despite a surge in Corn futures.

Except for 7¢ and 35¢ lower in the front two contracts, Live Cattle futures closed an average of 31¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for 2¢ to 12¢ lower in the back three contracts.

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

Choice boxed beef cutout value was $2.51 higher Tuesday afternoon at $213.60/cwt. Select was $1.15 higher at $187.06.

Corn futures closed 6¢ to 8¢ higher through Jul ’20 and then mostly 1¢ to 2¢ higher. Presumably, the surge had to do with the pending winter storm in the North, combined with ongoing delayed crop maturity.

Soybean futures closed mostly 5¢ to 6¢ higher.

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Major U.S. financial indices closed sharply lower on Tuesday, with reports of dimming hopes for a trade resolution between the U.S. and China.

The Dow Jones Industrial Average closed 313 points lower. The S&P 500 closed 45 points lower. The NASDAQ was down 132 points.

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“If the Kansas plant reopens as announced (by early January 2020), and Mother Nature does not dish out another very harsh fall and winter, as 2018-19 did for many U.S. cattle feeders, LMIC projects positive closeouts for the first five months of 2020,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Breakeven sales prices for February through May of 2020 are in the $113 to $116/cwt. range. At this time, feeding out 750-lb. steers that are scheduled to be marketed in mid-June through mid-September looks like a breakeven proposition at best. That is, would be a loss if all economic costs are considered. Of course, it is common for that  timeframe to be the least profitable.”

LMIC’s assessment is based on feeding in a commercial Southern Plains feedlot and assumes animals are sold on the cash market, i.e. no hedging and does not include premiums incorporated into quality carcass-based pricing programs.

In the meantime, LMIC estimated September feedlot returns at -$150 to -$155 per fed steer, driven by impacts from the Tyson plant fire. Those were the steepest losses since October 2016. Analysts project moderating losses in October and November and then positive returns in December.

2019-10-08T19:50:46-05:00

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