Calves and feeder cattle sold from $5/cwt. lower to $5 higher, according to the Agricultural Marketing Service (AMS). Auction receipts were heavy as some markets hosted their last sales before the holidays, which caused some truck shortages.
AMS analysts say the strongest demand was for lighter-weight calves (300-450 lbs.) suitable for summer grazing, as well as heavy yearlings that fit the April board.
In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee says, “There is no doubt the strongest demand (Tennessee) has continued to be for weaned and vaccinated calves as was evident by the $11/cwt. premium for 525-lb. calves. The expectation is that the run of calves will slow through the end of the year with the holiday season knocking on the door, but favorable weather conditions could result in some producers continuing to set wheels under their calf crop. The slightly stronger calf prices the past couple of weeks are largely due to higher Feeder Cattle futures prices.”
Feeder Cattle futures closed an average of $1.06 higher week to week on Friday, except for 5¢ lower in spot Jan.
“Most Feeder Cattle futures contract prices have displayed considerable strength the past two weeks and are trading at the upper end of the recent trading range. This does not mean they have traded to the contract high, but there is reason to believe Feeder Cattle futures will, at a minimum, hold their ground for a little while and maybe even move higher,” Griffith says.
At the same time, grain futures continue to find support from lower estimated ending stocks in the U.S., as well as uncertainty about crop weather in South America.
USDA’s Economic Research Service (ERS) left the season-average corn price for 2020-21 unchanged at $4/bu., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). They increased the season average soybean price 15¢ to $10.55 bu. Projected wheat price was unchanged at $4.70/bu.
Fed Cattle Prices Softer
Last week, negotiated cash fed cattle prices were generally $2 lower on a live basis in the Southern Plains at $108/cwt., and $4-$5 lower in the western Corn Belt at $104-$105. Dressed trade was $4 lower in the western Corn Belt at $168. The previous week, prices in Nebraska were at $110 on a live basis and at $172-$174 in the beef.
Estimated total cattle slaughter last week of 665,000 head was 2,000 head fewer than the previous week and 11,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 30.63 million head is 1.07 million less (-3.38%) than a year earlier.
Live Cattle futures closed an average of 91¢ higher week to week on Friday (45¢ to $1.55 higher) except for 12¢ lower in spot Dec.
“Futures traders make trades based on many different sets of information, and a coronavirus vaccine may be one of them. However, it is not known how consumers will react when a vaccine is available to the general public, nor will the change affect long-term beef and cattle prices,” Griffith says.
He’s referring to Friday’s announcement thatthe U.S. Food and Drug Administration (FDA) issued emergency use authorization for a vaccine for the prevention of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in individuals 16 years of age and older. The emergency use authorization allows the Pfizer-BioNTech COVID-19 Vaccine to be distributed in the U.S.
WASDE projected the annual average five-area direct steer price for next year $1 higher than the previous month at $115/cwt. That would be $6.54 more than this year’s estimated average of $108.46. For next year, prices are forecast at $113 in the first and second quarters; $114 in the third.
Beef Values Keep Sinking
Wholesale beef values declined significantly last week as holiday buying appeared to be complete.
Choice boxed beef cutout value was $21.14 lower week to week on Friday at $213.88/cwt. Select was $21.80 lower at $195.71.
“The large week-over-week price decline is a good indicator that retailers and restaurants have met their immediate needs as it relates to beef purchases. There is sure to be some late-year purchases to restock meat counters following the run consumers will make at grocery stores the next couple of weeks, but the process of restocking is unlikely to make boxed beef prices shoot higher,” Griffith explains.
Moreover, Griffith says it’s likely cutout prices will continue to decline, Choice more than Select, as consumer demand in the winter typically shifts seasonally away from middle meats and toward end meats.
Overall, Griffith says, “Beef demand has remained strong throughout the pandemic, and reopening of restaurants and food service will most likely send the market back to pre-coronavirus tendencies.”
Estimated beef production for last week of 559 million lbs. is 800,000 less than the previous week. Estimated year-to-date beef production of 25.46 billion lbs. is 227 million lbs. less (-0.88 %) than the same time last year.
The average dressed steer weight the week ending Nov. 28 was 921 lbs., which was 2 lbs. lighter than the previous week but 10 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 850 lbs., which was 3 lbs. heavier than the prior week and 10 lbs. heavier than the prior year.
The WASDE forecasts U.S. beef production for next year at 27.26 billion lbs., which was 105 million lbs. less than the previous month’s projection, on lower expected fed and non-fed cattle slaughter in the first half of 2021. If realized, beef production next year would be just 22 million lbs. more than this year.
Friday to Friday Change
Weekly Auction Receipts
| Dec. 11 | Auction | Direct |
Video/net |
Total |
|
354,700 (+76,100) |
27,000 (-7,500) |
5,500 (-54,500) |
387,200 (+14,100) |
CME Feeder Index
| CME Feeder Index* | Dec. 10 | Change |
| $136.66 | – $2.52 |
*Wednesday-to Wednesday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec.11 | Change |
| 600-700 lbs. | $150.74 | – $1.63 |
| 700-800 lbs. | $141.42 | – $2.31 |
| 800-900 lbs. | $136.69 | – $4.30 |
South Central
| Steers-Cash | Dec. 11 | Change |
| 500-600 lbs. | $155.94 | + $1.70 |
| 600-700 lbs. | $141.69 | + $0.22 |
| 700-800 lbs. | $135.67 | – $1.62 |
Southeast
| Steers-Cash | Dec. 11 | Change |
| 400-500 lbs. | $154.44 | + $0.27 |
| 500-600 lbs. | $139.60 | – $0.74 |
| 600-700 lbs. | $128.67 | – $1.55 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 11 ($/cwt) | Change |
| Choice | $213.88 | – $21.14 |
| Select | $195.71 | – $21.80 |
| Ch-Se Spread | $18.17 | + $0.66 |
Futures
| Feeder Cattle | Dec. 11 | Change |
| Jan ’21 | $139.725 | – $0.050 |
| Mar | $140.550 | + $1.125 |
| Apr | $141.900 | + $1.125 |
| May | $142.425 | + $0.800 |
| Aug | $147.825 | + $0.975 |
| Sep | $147.950 | + $1.400 |
| Oct ’21 | $147.725 | + $1.225 |
| Nov | $147.300 | + $0.775 |
| Live Cattle | Dec. 11 | Change |
| Dec | $108.750 | – $0.125 |
| Feb ’21 | $113.250 | + $0.850 |
| Apr | $117.375 | + $1.200 |
| Jun | $112.600 | + $1.550 |
| Aug | $111.975 | + $1.350 |
| Oct | $115.200 | + $0.750 |
| Dec | $117.650 | + $0.475 |
| Feb ’22 | $119.125 | + $0.450 |
| Apr | $119.825 | + $0.675 |
| Corn | Dec. 11 | Change |
| Dec | $4.242 | + $0.072 |
| Mar ’21 | $4.234 | + $0.030 |
| May | $4.264 | + $0.032 |
| Jly | $4.282 | + $0.042 |
| Sep | $4.140 | + $0.036 |
| Oct | $4.122 | + $0.020 |
| Oil CME-WTI | Dec. 11 | Change |
| Jan ’21 | $46.57 | + $0.31 |
| Feb | $46.75 | + $0.33 |
| Mar | $46.87 | + $0.33 |
| Apr | $46.96 | + $0.36 |
| May | $47.00 | + $0.39 |
| Jun | $46.97 | + $0.41 |
Equities
| Equity Indexes | Dec. 11 | Change |
| Dow Industrial Average | 30046.37 | – 171.89 |
| NASDAQ | 12377.87 | – 86.36 |
| S&P 500 | 3663.46 | – 35.66 |
| Dollar (DXY) | 90.98 | + 0.17 |