Cattle Current Weekly Highlights-Week ending Aug. 10, 2018

Cattle Current Weekly Highlights-Week ending Aug. 10, 2018

Calves and yearlings sold fully steady to $5/cwt. higher, supported by the previous week’s higher cash fed cattle market, according to the Agricultural Marketing Service (AMS). 

“Despite cattle futures whipsawing back and forth, a large corn crop looming ahead has many producers wanting calves and yearlings to feed or background, especially farmer feeders,” say AMS analysts. “Several auctions, especially in Missouri, noted that many calves that normally come to town in the fall are finding their way to the auction earlier as pasture conditions are deteriorating due to drought conditions.” 

Week to week on Friday, Feeder Cattle futures closed an average of $3.21 lower.

“Despite strong demand, it may be difficult for calf and feeder cattle prices to maintain the current level as the seasonally strong supply makes its way to town,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This comment is made due to the seasonal tendency of calf prices to decline during the fall months and the expected larger calf crop compared to a year ago. Contrary to this line of thought, the fall 2017 marketing time period had strong calf and feeder cattle marketings, and prices remained extremely strong throughout the entire period. Despite not having seasonal price movement in the calf market in 2017, producers should not be betting the farm on the same price action in 2018. Most of the fundamental information, including fed cattle prices, calf numbers, reduced forage availability in many areas and traditional marketing patterns are suggesting lower calf prices this fall.”

Griffith also points to weaker feedlot returns as a source of potential price pressure.

Cash fed prices were mainly $2-$3 lower last week on a live basis at mostly $110-$111/cwt. Dressed prices were generally $3-$4 lower at $174-$176.

Live Cattle futures closed an average of $2.13 lower week to week on Friday ($1.12 to $2.75 lower).

Choice boxed beef cutout value was $1.86 higher week to week on Friday at $206.61/cwt. Select was 68¢ higher at $197.77.

Beef demand continues to support cattle price strength.

“Unemployment is very low and GDP growth is strong, meaning that consumers are ready to spend money on good cuts of meat at the retail shelf and in their favorite restaurants,” says Levi Russell, Extension livestock economist at the University of Georgia, in the most recent issue of In the Cattle Markets. He explains first-quarter domestic demand was 4 points higher year over year.

Moreover, Griffith points out retail beef prices remain close to last year’s levels.

That’s with surging beef production. Through last week, year-to-date estimated total cattle slaughter under federal inspection 19.83 million head, which was 2.9% more than the same period last year.

Total red meat production under federal inspection last week (ending Aug. 11)

was an estimated at 1007.7 million lbs, according to AMS. That’s 1.8% more than the previous week and 1.1% more than the prior year. Cumulative meat production for the year to date was 3.2% more than a year earlier.

At the same time, U.S. beef exports continue to defy expectations, in light of global trade turmoil. In fact, U.S. beef exports continue on a record pace, according to the latest data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June beef exports of 115,718 metric tons (mt), including variety meats, were 6% more than the previous year. The value of June beef exports was 19% more year over year at $722.1 million, just slightly less than the new record set the previous month.

Beef exports for the first half of this year were also record large in both volume and value. Export volume for the first two quarters was 9% more than the same period last year at 662,875 mt. Export value was up 21% at just over $4 billion.  In previous years, export value never topped the $4 billion mark before August.

Beef export value averaged $313.56 per head of fed slaughter in June, up 19% from a year ago. The first-half average was $316.94 per head, up 18%.

Grain Markets Under Pressure

Calf and feeder cattle prices could get a shot in the arm next week from the monthly World Agricultural Supply and Demand Estimates released Friday.

“The grain market over the last couple of weeks was starting to find some stability, with dry areas around the globe,” say AMS analysts. “That was until Friday’s Crop Production report was released with corn production forecast at 14.6 billion bu., down less than 1% from last year, with yields expected to average 178.4 bu./acre up 1.8 bu. from last year, with an estimate of 81.8 million acres to harvest. Soybeans were forecast at 4.59 billion bu., up 4% from last year with yields expected to average 51.6 bu./acre up 2.5 bu. from last year.”  

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Aug. 10

Auction (head)

(Change)

Direct (head)

(Change)

Video/net (head)

(Change)

Total (head)

(Change)

 

158,200

(+1,300)

73,000

(+5,700)

231,700

(+201,500)

462,900

(+208,500)

 

CME Feeder Index

CME Feeder Index Aug. 9 Change
  $151.12   +   1.38

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 10  Change 
600-700 lbs. $167.21 –   $0.77
700-800 lbs. $162.05 +   $4.34
800-900 lbs. $154.70 +   $3.53

South Central

Steers-Cash Aug. 10 Change
500-600 lbs. $167.02 +   $4.12
600-700 lbs. $158.76 +   $0.17
700-800 lbs. $153.01 +   $2.19

Southeast

Steers-Cash Aug. 10 Change 
400-500 lbs. $158.02 –   $0.73
500-600 lbs. $151.54 –   $0.97
600-700 lbs. $143.09 –   $0.68

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 10 ($/cwt) Change
Choice $206.61 +   $1.86
Select $197.77 +   $0.68   
Ch-Se Spread    $8.84 +   $1.18

 

Futures

Feeder Cattle  Aug. 10 Change
Aug $149.900 –    $2.950
Sep $149.525 –    $3.500
Oct $149.475 –    $3.550
Nov $149.925 –    $3.550
Jan ’19 $148.650 –    $3.600
Mar $147.825 –    $3.300
Apr $149.050 –    $2.725
May $149.000 –    $2.500

 

Live Cattle   Aug. 10 Change
Aug $108.250 –    $2.425
Oct $109.250 –    $2.750
Dec $113.100 –    $2.400
Feb ’19 $116.375 –    $2.475
Apr $117.875 –    $2.425
Jun $111.850 –    $2.050
Aug $110.775 –    $1.950
Oct $112.300 –    $1.700
Dec $113.875 –    $1.125

 

Corn futures Aug. 10 Change
Sep $3.576 –    $0.120
Dec $3.716 –    $0.126
Mar ’19 $3.832 –   $0.122 
May $3.902 –    $0.122
Jul $3.960 –    $0.110
Sep $3.972 –    $0.104

 

Oil CME-WTI Aug. 10 Change
Sep $67.63 –     $0.86
Oct $66.94 –     $0.41
Nov $66.54 –     $0.39
Dec $66.21 –     $0.38
Jan $65.97 –     $0.32
Feb $65.64 –     $0.23

 

Equities

Equity Indexes Aug. 10 Change
Dow Industrial Average 25313.14 –    149.44
NASDAQ    7839.11 +       27.09
S&P 500    2833.28 –         7.07
Dollar (DXY)        96.26 +         1.06
2018-08-11T19:39:00-05:00

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