“Feeder calves and stocker calves under 800 lbs., especially those carrying a minimal amount of flesh, showed the way with the best demand,” according to analysts with the Agricultural Marketing Service (AMS). “Buyers continue to shy away from cattle carrying too much flesh condition for their weight.”
Overall, AMS pegged the price trend for steers and heifers at $2/cwt. lower to $2 higher.
Week to week on Friday, except for 72¢ lower in spot Apr, Feeder Cattle futures closed an average of $1.49 higher (27¢ to $3.27 higher at the back).
Weather-delayed forage growth and cattle finishing appear to be capping demand currently.
Lighter Carcass Weights Remain Supportive
With the latest widespread storm, AMS analysts say, “There is bound to be more weight loss of nearly-finished cattle throughout the Northern Plains. Just how much was lost will be evident in the coming months as calf-feds get closer to harvest. Currently, cattle are not meeting their projected out-weights and cost of gains are higher than anticipated just a few months ago.”
The average dressed steer weight was 7 lbs. lighter than a year earlier at 865 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report for the week ending Mar. 31. The average dressed heifer weight was 8 lbs. lighter at 806 lbs. Fed steer and heifer slaughter was 16,070 head more at 480,913 head. Total cattle slaughter for the week of 618,707 head was 28,320 head more. Beef production was 15.8 million lbs. more (+3.3%) at 496.7 million lbs.
USDA’s Economic Research Service (ERS) reduced expected beef production for this year to 27.280 billion lbs. (-20 million lbs.) in the latest World Agricultural Supply and Demand Estimates (WASDE).
“The beef production forecast is reduced from the previous month, primarily on lower carcass weights, but higher total cattle slaughter for 2019 is expected to partially offset declines in carcass weights,” say ERS analysts.
Projected WASDE fed steer prices (5-area Direct) were lowered slightly based on a lower price in the first quarter. The 5-area Direct fed steer price is projected at $122-$126/cwt. in the second quarter; $111-$119 in the third and $109-$119 in the fourth.
Pork Potential Adds Lift
Through late Friday afternoon, based on USDA reports, the only trendable negotiated cash fed cattle trade for the week was steady money in the Southern Plains at $124/cwt.
Week to week on Friday, Live Cattle futures closed an average of 90¢ higher.
“The beef market is inching ever closer to grilling season and the unofficial start of summer that comes with Memorial Day weekend grilling. One might surmise that this should provide some support in the near term, but it may take the passing of Easter before interest in beef begins to soar,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Market participants should also consider that feedlots will become more interested in filling pen space as favorable weather conditions become more evident and as wet pens dry. In some instances, it appears the market is priming the pump to make a run.”
Week to week on Friday, Choice boxed beef cutout value was $1.91 higher at $228.84/cwt. Select was 74¢ higher at $221.02.
If Lean Hog futures are any indication, then more beef price support could emerge based on expectations of improved international pork demand, stemming from African Swine Fever in China and Southeast Asia.
Rabobank expects Chinese pork production losses of 25% to 35% this year. Analysts there note the loss is at least 30% larger than annual U.S. pork production and nearly as large as Europe’s annual pork supply.
Rabobank also expects production losses to exceed 10% in Vietnam, the world’s fifth largest pork-producing country and a significant supplier to China.
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Apr. 11||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$169.07||+ $1.59|
|700-800 lbs.||$154.15||– $0.06|
|800-900 lbs.||$142.03||– $1.34|
|400-500 lbs.||$159.01||– $7.78|
|500-600 lbs.||$144.11||– $14.42|
|600-700 lbs.||$132.27||– $12.24|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Apr. 12 ($/cwt)||Change|
|Ch-Se Spread||$7.82||+ $1.17|
|Feeder Cattle||Apr. 12||Change|
|Jan ’20||$157.300||+ $1.825|
|Live Cattle||Apr. 12||Change|
|Feb ’20||$124.600||+ $0.650|
|Corn futures||Apr. 12||Change|
|Oil CME-WTI||Apr. 12||Change|
|Equity Indexes||Apr. 12||Change|
|Dow Industrial Average||26412.30||– 12.69|
|S&P 500||2907.41||+ 14.67|
|Dollar (DXY)||96.94||– 0.45|