Cattle Current Weekly Highlights—Week ending Aug. 23, 2019

Cattle Current Weekly Highlights—Week ending Aug. 23, 2019

Calf and feeder cattle prices last week continued to rebound from bearishness tied to the Tyson fire.

Nationwide, steers and heifers sold $1-$5/cwt. higher, according to the Agricultural Marketing Service (AMS).

“The supply of feeders was light with receipts much lower than normal,” according to AMS analysts. “Coupling the week’s receipts with last week, a new two-week non-holiday low was set by only having 192,900 head sold at weekly auctions.”

After getting within spitting distance of where they were before the fire, Cattle futures fell on Friday, beneath the weight of a variety of factors that included record-high July U.S. red meat production, the sharp month-to-month increase in frozen beef supplies an sharply lower outside markets tied to increasingly volatile trade relations between the U.S. and China.

Feeder Cattle futures closed $2.77 and 87¢ higher in the front two contracts week to week on Friday and then an average of 31¢ lower.

“The finished cattle market experienced a soft rebound this week following last week’s precipitous decline,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A few dollars were gained back by cattle feeders, but they are still below where they were prior to the news of the Tyson fire. The story in all of this is what is happening in futures. The August Live Cattle contract has regained half of its losses but all the deferred contracts continue to be bottom feeders. The deferred contracts have failed to have any follow-through when compared to the August contract. When the August contract terminates, the October contract is likely to make some type of sudden movement since it will be the nearby contract. The strong basis will keep cattle moving out of feedlots.”

Week to week on Friday, Live Cattle futures closed an average of $1.54 higher through the front five contracts (60¢ higher to $4.70 higher in spot Aug) and then an average of 36¢ lower.

Choice boxed beef cutout value was $1.17 lower week to week on Friday afternoon at $237.52/cwt. Select was 55¢ lowerat $212.71.

“Beef markets reacted sharply higher last week as fears of reduced product availability initially led to the sharp rise in prices for Choice boxed beef, up 12% from the Aug. 9 close to the peak Aug. 21,” AMS analysts explain. “Much of this rise was attributed to buying for the coming Labor Day holiday (September 2) as retailers competed to acquire sufficient product to cover planned holiday promotions. Prices have since begun to decline as buyers cover their needs and retreat from the market.”

“…there was concern that the reduced slaughter capacity may influence the short and intermediate term availability of beef items. Using weekly slaughter data, it is too early to tell if slaughter has actually slowed due to the Tyson facility being shut down,” Griffith says. “However, it appears that other facilities have ramped up chain speed and are running on Saturday to fill the gap. One should not be so naïve to think that packers are running faster and harder to help the cattle industry. Packers are attempting to pick up the slack because they are making profits that exceed $400 per head. Thus, there is plenty of incentive for packers to run chain speeds as quickly as possible and keep killing cattle. Paying workers overtime wages is a small price to pay to take advantage of the current beef market. Maybe the one positive for cattle producers to take away from this is that beef demand is strong.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 23

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

87,400

(-17,400)

64,900

(+37,000)

65,900

(-4,200)

218,200

(+15,400)

 

CME Feeder Index

CME Feeder Index* Aug. 22 Change
  $139.72 + 2.12

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 23 Change
600-700 lbs. $160.37 + $1.44
700-800 lbs. $152.10 + $3.54
800-900 lbs. $145.66 + $2.20

 

South Central

Steers-Cash Aug. 23 Change
500-600 lbs. $149.29 + $1.08
600-700 lbs. $144.66 + $2.20
700-800 lbs. $140.09 + $3.89

 

Southeast

Steers-Cash Aug. 23 Change
400-500 lbs. $144.73 + $3.13
500-600 lbs. $136.27 + $2.49
600-700 lbs. $131.96 + $3.18

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 23 ($/cwt) Change
Choice $237.52 –  $1.17
Select $212.71 –  $0.55
Ch-Se Spread $24.81 –  $0.62

 

Futures

Feeder Cattle  Aug. 23 Change
Aug $137.350 + $2.775
Sep $133.250 + $0.875
Oct $132.525 –  $0.325
Nov $132.300 –  $0.450
Jan ’20 $130.425 –  $0.500
Mar $130.225 –  $0.075
Apr $131.325 –  $0.100
May $131.900 –  $0.400

 

Live Cattle   Aug. 23 Change
Aug $104.625 +$4.700
Oct $99.400 +$1.350
Dec $104.300 +$0.775
Feb ’20 $109.725 +$0.800
Apr $111.900 +$0.600
Jun $104.800 – $0.025
Aug $103.000 – $0.200
Oct $105.250 – $0.325
Dec $107.950 – $0.900

 

Corn futures Aug. 23 Change
Sep $3.596 –  $0.114
Dec $3.676 –  $0.130
Mar ’20 $3.800 –  $0.126
May $3.884 –  $0.116
Jul $3.952 –  $0.104
Sep $3.990 –  $0.060

 

Oil CME-WTI Aug. 23 Change
Oct $54.17 –  $0.64
Nov $54.02 –  $0.40
Dec $53.74 –  $0.25
Jan ’20 $53.41 –  $0.15
Feb $53.09 –  $0.10
Mar $52.82 –  $0.08

 

Equities

Equity Indexes Aug. 23 Change
Dow Industrial Average  25628.90 -257.11
NASDAQ     7751.77 -144.22
S&P 500     2847.11 –   41.57
Dollar (DXY)          97.26 –    0.94
2019-08-26T12:40:57-06:00

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