Resurgent wholesale beef values and stronger negotiated cash fed cattle prices continued to support market optimism last week.
Nationwide, calves and feeders traded from $1/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). Those analysts note that many of the receipts in the Northern Plains were coming off summer grass, with the yearlings reported in excellent condition.
Feeder Cattle futures closed an average of 96¢ higher week to week on Friday (27¢ higher at the back to $1.45 higher toward the front).
“Feeder cattle prices are fairly strong right now. It does not hurt to market cattle earlier than normal if a profit can be achieved, and current prices appear profitable,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in is weekly market comments. “The markets to be wary of are the calf market and the slaughter cow market. The prices for both lighter-weight calves and slaughter cows are expected to come under pressure the next few months. Prices for both classes of animals have held up well thus far, but seasonal trends will likely pressure both of them as more of these classes make their way to the market. There may be some advantages for some producers to early wean calves and market their cull slaughter cows in the near term instead of waiting until October or November.”
Nearer-term, last week’s devastating derecho—a widespread, long-lasting, straight-line wind storm—that swept across the Midwest could add pressure to calf prices from the corn side of the equation.
For instance, based on MODIS satellite imagery and Storm Prediction Center preliminary storm reports, the Iowa Department of Agriculture and Land Stewardship believes 36 counties in Iowa were hardest hit by the derecho. Within those 36 counties, the storm likely had the greatest impact on 3.57 million acres of corn and 2.5 million acres of soybeans.
Corn futures were an average of 15¢ higher through the front six contracts, week to week on Friday, recovering a little more than what was lost the previous two weeks. Part of the that was the derecho and weather outlook and part was due to ending corn stocks in the World Agricultural Supply and Demand Estimates (WASDE) coming in lower than the trade expected.
Fed Cattle Prices Up Again
Negotiated cash fed cattle prices last week were mostly $4 higher on a live basis in the Southern Plains at $104/cwt., $3 higher in the Northern Plains at $106 and $2.50-$4.00 higher in the western Corn Belt at $106.50-$107.00. Dressed trade was $2 higher in Nebraska at $165 and $2-$7 higher in the western Corn Belt at $165-$170.
Through Thursday, the five-area direct weighted average steer price was $104.49/cwt. on a live basis, which was $3.21 more than the previous week, and just 91¢ less than the prior year, keeping in mind that the Aug. 9 Tyson fire last year slammed cattle markets. In the beef, the weighted average steer price was $168.06, which was $4.87 more than the previous week, and $2.40 less than the prior year.
Live Cattle futures closed an average of $2.23 higher week to week on Friday (60¢ higher at the back to $4.80 higher in spot Aug).
USDA’s Economic Research Service (ERS) increased the expected annual fed steer price for this year 50¢ from the previous month’s projection to $107.30/cwt., in the latest WASDE. Forecast prices are $101 in the third quarter, $104 in the fourth quarter and $105 in the first two quarters next year.
Overall wholesale beef values continued to gain ground for the second consecutive week. Choice boxed beef cutout value was $8.77 higher week to week on Friday at $214.24/cwt. Select was $6.54 higher at $199.29.
“Boxed beef prices are at their highest level since the middle of June. Much of this rebound is likely due to the upcoming Labor Day holiday as many grocery stores are making their final purchases for the last grilling holiday of the year,” Griffith says. “Choice prices are only $2/cwt. lower than the same week one year ago, while Select prices are about $7 higher than the same week last year. There may be some additional Labor Day beef buying, as it is still three full weeks down the road, which provides grocery stores a little more time to get product on the shelf. The beef market will continue to be supported as grocery stores make purchases to restock the meat counter following holiday purchases.”
Estimated total cattle slaughter last week of 640,000 was 7,000 head more than the previous week’s estimate, but 13,000 fewer than the same week a year earlier. Year-to-date estimated total cattle slaughter is 5.1% less than the same period last year at 19.69 million head. Estimated year-to-date total beef production is 2.4% less at 16.27 billion lbs.
Friday to Friday Change
Weekly Auction Receipts
| Aug. 14 | Auction | Direct |
Video/net |
Total |
|
158,100 (-13,700) |
66,500 (+100) |
7,000 (-255,400) |
231,600 (-268,000) |
CME Feeder Index
| CME Feeder Index* | Aug. 13 | Change |
| $142.25 | + $0.33 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Aug. 14 | Change |
| 600-700 lbs. | $160.61 | + $4.22 |
| 700-800 lbs. | $150.03 | + $3.44 |
| 800-900 lbs. | $144.08 | – $0.41 |
South Central
| Steers-Cash | Aug. 14 | Change |
| 500-600 lbs. | $157.38 | – $1.00 |
| 600-700 lbs. | $150.03 | + $0.21 |
| 700-800 lbs. | $143.40 | + $0.83 |
Southeast
| Steers-Cash | Aug. 14 | Change |
| 400-500 lbs. | $150.61 | + $0.97 |
| 500-600 lbs. | $140.08 | – $0.82 |
| 600-700 lbs. | $136.48 | + $3.37 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Aug. 14 ($/cwt) | Change |
| Choice | $214.24 | + $8.77 |
| Select | $199.29 | + $6.54 |
| Ch-Se Spread | $14.95 | + $2.23 |
Futures
| Feeder Cattle | Aug. 14 | Change |
| Aug | $143.925 | + $1.200 |
| Sep | $146.575 | + $1.450 |
| Oct | $147.425 | + $1.025 |
| Nov | $147.825 | + $0.850 |
| Jan ’21 | $145.225 | + $1.025 |
| Mar | $143.875 | + $1.150 |
| Apr | $144.175 | + $0.725 |
| May | $144.000 | + $0.275 |
| Live Cattle | Aug. 14 | Change |
| Aug | $107.600 | + $4.800 |
| Oct | $110.225 | + $3.775 |
| Dec | $112.825 | + $2.750 |
| Feb ’21 | $115.850 | + $2.050 |
| Apr | $117.800 | + $1.475 |
| Jun | $111.300 | + $1.500 |
| Aug | $109.900 | + $1.775 |
| Oct | $111.825 | + $1.375 |
| Dec | $114.800 | + $0.600 |
| Corn | Aug. 14 | Change |
| Sep | $3.244 | + $0.168 |
| Dec | $3.380 | + $0.174 |
| Mar ’21 | $3.492 | + $0.166 |
| May | $3.566 | + $0.154 |
| Jly | $3.624 | + $0.148 |
| Sep | $3.650 | + $0.124 |
| Oil CME-WTI | Aug. 14 | Change |
| Sep | $42.01 | + $0.79 |
| Oct | $42.31 | + $0.82 |
| Nov | $42.67 | + $0.81 |
| Dec | $43.00 | + $0.81 |
| Jan ’21 | $43.30 | + $0.82 |
| Feb | $43.58 | + $0.82 |
Equities
| Equity Indexes | Aug. 14 | Change |
| Dow Industrial Average | 27931.02 | + 497.54 |
| NASDAQ | 11019.30 | + 8.32 |
| S&P 500 | 3372.85 | + 21.57 |
| Dollar (DXY) | 93.10 | – 0.29 |