Grass demand continued to fuel calf and feeder cattle prices, with steers and heifers trading $2-$7/cwt. higher—steers $10-$14 higher in Nebraska and South Dakota—according to the Agricultural Marketing Service (AMS).
“The most gain on steers would be the ‘grass crazy’ demand as some producers held off purchasing steers under 650 lbs. that are suitable for grass until warmer weather was imminent,” say AMS analysts. “Demand at most auctions nationwide was described from good to very good as out-of-state buyers showed up where they hadn’t been seen for a while. Feedlot pens in the Northern Plains have dried considerably and farmer-feeders came to town to procure cattle before they become swamped with planting spring crops.”
Continued optimism in Lean Hog futures and strengthening wholesale beef values helped lift Cattle futures for the week; Futures markets were closed on Friday.
Week to week on Thursday, except for 27¢ higher in spot Apr, Feeder Cattle futures closed an average of $2.49 higher ($1.67 to $3.02 higher).
There could be some early-week pressure, in response to the monthly Cattle on Feed report that was issued after futures markets closed on Thursday.
March placements (+4.84%) and total cattle on feed (+2.00%) were more than average analysts expectations ahead of the report.
“One thing that analysts will be looking at in future months is the amount of wheat pasture cattle that will be moving in May,” say AMS analysts.
Cash Fed Cattle Prices Higher
When all was said and done, negotiated cash fed cattle trade ended up $2 higher in the Southern Plains at $126/cwt. on a live basis, and steady to $4 higher in Nebraska and the western Corn Belt at mostly $130. Dressed trade was $2-$4 higher at $208.
Week to week on Thursday, Live Cattle futures closed an average of $2.00 higher ($1.50 higher at the back to $2.52 higher in spot Apr).
Week to week on Friday, Choice boxed beef cutout value was $4.81 higher at $233.65/cwt.—the highest level since June of 2017. Select was 53¢ lower at $220.49.
“With the box beef cutout increasing in value each day, packers have increased the need for cattle,” say AMS analysts. Fed cattle slaughter weights continue to trend below year ago levels as the hard winter in the North took a toll on weight gains.”
The average dressed steer weight for the week ending Apr. 6 was 865 lbs., which was 7 lbs. less than a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 5 lbs. less at 804 lbs.
In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee points out the low drop credit continues to drag on prices.
“The steer by-product price is currently trading just over $9/cwt., which is one of the lowest values dating back to 2009,” Griffith says. “This compares to the 2011 through 2014 time period when the drop value ranged from about $12.50 to $16.50/cwt. Thus, a 1,300-pound steer in today’s market would return about $117 per head while a $14 price would return $182 per head. To say the least, the drop credit is negatively influencing finished cattle prices compared to the past few years and there is little to no sign of the market exiting its poor condition.”
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Apr. 17||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|400-500 lbs.||$170.17||+ $2.82|
|500-600 lbs.||$160.22||+ $1.21|
|600-700 lbs.||$146.05||+ $1.94|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Apr. 19 ($/cwt)||Change|
|Ch-Se Spread||$13.16||+ $5.34|
|Feeder Cattle||Apr. 18||Change|
|Jan ’20||$159.650||+ $2.125|
|Live Cattle||Apr. 18||Change|
|Feb ’20||$126.075||+ $2.200|
|Corn futures||Apr. 18||Change|
|Mar ’20||$4.002||– $0.020|
|Oil CME-WTI||Apr. 18||Change|
|Equity Indexes||Apr. 18||Change|
|Dow Industrial Average||26559.54||+ 416.49|
|S&P 500||2905.03||+ 16.71|
|Dollar (DXY)||97.45||+ 0.29|