Last week’s cattle markets unfolded against the backdrop of extreme volatility on Wall Street, tied in part to inversion of the yield curve, which some fear points to domestic economic recession sooner rather than later. Otherpressures included lingering, unresolved trade issues, and signs of slowing global economic growth.
Calf and feeder cattle prices came under pressure from hectic volume the previous week, wobbly cattle futures and a market channel clogged by winter weather the previous weekend.
Overall, steers and heifers traded $3-$8/cwt. lower in most areas, but held to unevenly steady in the North Central states, according to the Agricultural Marketing Service (AMS).
“Feedyards took money off orders as areas that were snowy last week
have awfully muddy pen conditions,” AMS analysts explained. “Prior to the large snowstorm that moved across the Plains last week, temperatures weren’t cold enough to get the ground frozen before the snow flew…Daily gains are greatly affected and those cattle that are in the latest stages of finish will have expected out-dates adjusted.”
Heading into the most recent weekend, widespread snow, ice, rain and freezing rain were expected across the Southern Plains and Southwest.
Feeder Cattle futures closed an average of $1.00 lower week to week on Friday, likely pressured some from the steady increase in grain prices the last couple of weeks. Spot Dec corn on the CME, for instance closed the week 15¢ higher compared to two weeks earlier.
“Given that calf prices have been sluggish this fall, producers still hanging on to the calf crop may benefit from hanging on a little longer, as January generally brings slightly higher prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
Fed Prices Firm
Negotiated cash fed cattle trade remained mostly undeveloped through Friday afternoon, according to USDA reports, but early indications were for steady to higher money than the previous week’s higher prices.
For instance, there was some light to moderate trade in the western Corn Belt at $115-$117/cwt., which was $1 higher than the previous week. Early dressed sales were steady at $183-$185. By late in the day, AMS reported some dressed trade in Nebraska at $187, which was $2-$4 more than the previous week.
Live Cattle futures closed an average of $1.27 higher week to week on Friday across the front half of the board and then an average of 40¢ higher (7¢ to 65¢ higher) except for 65¢ lower in the back contract.
Wholesale beef prices provided a modicum of support for at least one more week.
“Boxed-beef cutout values continue to hold together, for the most part, but have started to feel some pressure as last-minute buying for upcoming holidays is happening,” said AMS analysts.
Week to week, Choice boxed beef cutout value was $1.68 higher Friday afternoon at $214.29/cwt. Select was $2.09 higher at $200.50.
“The domestic cattle markets continue to be supported by international beef demand, based on strong October export quantities and values,” Griffith says. From January through October, the United States has exported 1.91 billion lbs. of beef (not including variety meats), which was 12% higher than the same 10 months one year ago. Similarly, the value of beef exports from January through October of 2018 was 19% greater than the same months in 2017 and totaled $6.19 billion.”
October beef exports totaled 117,838 metric tons (mt), up 6% from a year ago, valued at $727.4 million, which was 10% more year over year and the second-highest monthly total on record. That’s according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Beef export value equated to $317.53 per head of fed slaughter in October, up 5% from a year ago. For January through October, the per-head average was up 15% to $320.50.
“Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” says Dan Halstrom, USMEF president and CEO. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Dec. 07 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
330,400 (+40,900) |
51,000 (+1,600) |
3,600 (-40,200) |
385,000 (+2,300) |
CME Feeder Index
| CME Feeder Index | Dec. 05 | Change |
| $145.53 | – $1.94 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec. 07 | Change |
| 600-700 lbs. | $156.66 | + $1.60 |
| 700-800 lbs. | $151.44 | – $0.99 |
| 800-900 lbs. | $149.48 | – $2.41 |
South Central
| Steers-Cash | Dec. 7 | Change |
| 500-600 lbs. | $154.99 | – $3.60 |
| 600-700 lbs. | $145.08 | – $3.25 |
| 700-800 lbs. | $142.51 | – $4.64 |
Southeast
| Steers-Cash | Dec. 07 | Change |
| 400-500 lbs. | $147.37 | – $9.40 |
| 500-600 lbs. | $139.62 | – $6.73 |
| 600-700 lbs. | $133.71 | – $2.82 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 07 ($/cwt) | Change |
| Choice | $214.29 | + $1.68 |
| Select | $200.50 | + $2.09 |
| Ch-Se Spread | $13.79 | – $0.41 |
Futures
| Feeder Cattle | Dec. 07 | Change |
| Jan ’19 | $144.375 | – $0.850 |
| Mar | $141.875 | – $0.975 |
| Apr | $142.525 | – $1.100 |
| May | $142.850 | – $1.100 |
| Aug | $147.100 | – $1.075 |
| Sep | $146.775 | – $1.000 |
| Oct | $146.575 | – $0.950 |
| Nov | $145.975 | – $0.950 |
| Live Cattle | Dec. 07 | Change |
| Dec | $117.900 | + $0.975 |
| Feb ’19 | $121.525 | + $1.025 |
| Apr | $123.625 | + $1.625 |
| Jun | $115.100 | + $1.450 |
| Aug | $112.225 | + $0.650 |
| Oct | $113.625 | + $0.550 |
| Dec | $115.625 | + $0.325 |
| Feb ’20 | $117.075 | + $0.075 |
| Apr | $118.050 | – $0.650 |
| Corn futures | Dec.07 | Change |
| Dec | $3.740 | + $0.076 |
| Mar ’19 | $3.854 | + $0.078 |
| May | $3.926 | + $0.076 |
| Jul | $3.992 | + $0.078 |
| Sep | $3.992 | + $0.052 |
| Dec | $4.030 | + $0.034 |
| Oil CME-WTI | Dec. 07 | Change |
| Jan ’19 | $52.61 | + $1.68 |
| Feb | $52.81 | + $1.72 |
| Mar | $53.05 | + $1.82 |
| Apr | $53.31 | + $1.95 |
| May | $53.58 | + $2.08 |
| Jun | $53.82 | + $2.22 |
Equities
| Equity Indexes | Dec. 07 | Change |
| Dow Industrial Average | 24388.95 | – 949.51 |
| NASDAQ | 6969.25 | – 361.29 |
| S&P 500 | 2633.08 | – 127.09 |
| Dollar (DXY) | 96.71 | – 0.49 |