Improving weather conditions, stronger cash fed cattle prices the previous week and firmer Cattle futures helped lift calf and feeder cattle prices
Compared to the previous week, steers and heifers sold steady to $5/cwt. higher, according to the Agricultural Marketing Service (AMS). There were instances of up to $10 higher on some weight categories. Year to date, AMS analysts note auction receipts are the most since 2011.
Feeder Cattle futures closed an average of $3.07 higher week to week on Friday ($2.45 to $3.90 higher).
“Order buyers had an easier time of finding orders this week as the mud started to firm up in areas that had very muddy pens since the Sunday after Thanksgiving,” say AMS analysts. “Time is of the essence as feedyards and backgrounders will soon be reluctant to receive incoming cattle during the holidays…Producers’ time to finish their marketing needs for the year are waning as many auctions take off for two full weeks around the holidays.”
Andrew P. Griffith, agricultural economist at the University of Tennessee notes in his weekly market comments that feeder prices could increase early next year with resurgent demand from farmer-feeders.
“Farmer-feeders generally become active in the feeder cattle market immediately following harvest, but harvest was delayed in many areas due to precipitation, which meant farmer-feeders remained on the sidelines,” Griffith says. “As harvest is now coming to completion in many areas, farmer-feeders will begin to exercise some of their purchasing power.”
So, logic suggests atypically concentrated farmer-feeder demand later than usual. Griffith emphasizes the notion is no guarantee of higher prices after the first of the year, but adds that farmer-feeder purchasing power gains strength with low grain prices.
Negotiated cash fed cattle prices in the Southern Plains on Friday were mainly steady with the previous week at $119/cwt. Early dressed sales in Nebraska were $1 higher at $188. Though too few to trend, early live sales in the western Corn Belt were $1 higher at $117, while early dressed sales of $187 were trading at the upper end of the previous week’s trading range in the region.
Live Cattle futures closed an average of $1.04 higher week to week on Friday (45¢ higher in the back contract to $1.45 higher).
“The December Live Cattle contract traded as low as $111 at the end of August and was still only trading in the $114-$115 range one month ago,” Griffith says. “However, prices have been slowly increasing since the middle of November with nearly a $5 move. The increase is supporting late-year finished cattle marketings, but many feedlots have turned their focus to the February and April contracts that have witnessed similar price escalations.” He notes the April contract is the focus for most of the cattle placed in October and November, as well as heavy cattle placed in December.
“Packers have a vested interest in moving every animal they can through the pipeline with positive margins and the way the holidays fall at the end of the
year,” explain AMS analysts. “With the Christmas and New Year’s holidays on a Tuesday, tempered harvest schedules are expected to almost come to a screeching halt.”
In the meantime, they note the previous week’s estimated 667,000-head cattle slaughter, if realized, would be the second largest weekly total since January of 2012.
Fed steer prices (5-area Direct) for the first quarter of 2019 are projected at $119-$125/cwt. by USDA’s Economic Research Service, in the monthly World Agricultural Supply and Demand Estimates. Prices in the second quarter are projected to be $118-$128; and $109-$119 in the third.
Week to week, Choice boxed beef cutout value was $3.33 lower Friday afternoon at $210.96/cwt. Select was $2.64 higher at $203.14.
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index||Dec. 13||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$158.79||+ $2.13|
|700-800 lbs.||$150.97||– $0.47|
|800-900 lbs.||$146.11||– $3.37|
|500-600 lbs.||$156.73||+ $1.74|
|600-700 lbs.||$145.47||+ $0.39|
|700-800 lbs.||$144.12||+ $1.61|
|400-500 lbs.||$147.51||+ $0.14|
|500-600 lbs.||$141.97||+ $2.35|
|600-700 lbs.||$139.00||+ $5.29|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Dec. 147 ($/cwt)||Change|
|Ch-Se Spread||$7.82||– $5.97|
|Feeder Cattle||Dec. 14||Change|
|Jan ’19||$147.575||+ $3.190|
|Live Cattle||Dec. 14||Change|
|Feb ’19||$122.400||+ $0.875|
|Feb ’20||$118.025||+ $0.950|
|Mar ’19||$3.846||– $0.008|
|Oil CME-WTI||Dec. 14||Change|
|Jan ’19||$51.20||– $1.41|
|Equity Indexes||Dec. 14||Change|
|Dow Industrial Average||24100.51||– 288.44|
|S&P 500||2599.95||– 33.13|
|Dollar (DXY)||97.06||+ 0.35|