Warily higher Cattle futures prices, the prospect for stronger fundamentals next year and last-minute marketing for the season lent support to calf and feeder cattle prices last week.
Nationwide, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS). However, the late-week storm pressured buyer demand in some areas.
“A strong winter storm bringing as much as 11 plus inches of snow to Oklahoma and the East coast has many—mostly wheat producers—weary of health issues,” explained the AMS reporter at Thursday’s Superior Livestock Video Auction. “Demand was moderate to good for feeder cattle; mostly light to moderate for calves as producers in wheat country are currently turning cattle out or looking to do so if health issues are in check.”
Feeder Cattle futures closed an average of $1.76 higher week to week on Friday, from 72¢ higher in spot Jan to $2.35 higher.
“Calf and feeder cattle prices are definitely not at their peak right now, but they also are not terrible. Prices for calves should begin to gain traction moving into the first quarter of 2021. There is also optimism for the yearling cattle market in 2021,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
In the meantime, analysts with USDA’s Economic Research Service (ERS) point out feeder steer prices (750-800 lbs.) in November were $8 less year over year at $138.22/cwt.
“The first prices reported in December were almost $13 below the same week last year at $136.67,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook.
Even so, ERS left the projected fourth-quarter feeder steer price unchanged at $137. Forecast prices (basis Oklahoma City) for next year were also unchanged: $133 in the first quarter, $136 in the second quarter, $141 in the third quarter and $138 for the annual average.
Iffy weather in other parts of the world, the grain port strike in Argentina, the lower U.S. dollar and strong exports continue to support grain prices.
U.S. net corn export sales for the week ending Dec. 10 were 41% more than the previous week (2020-21 market year) and 40% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report.
Week to week on Friday, Corn futures closed an average of 10¢ higher through the front six contracts.
Net U.S. soybean export sales were 62% more than the previous week and 20% more than the prior four-week average.
Week to week on Friday, Soybean futures closed an average of 51¢ higher through the front six contracts.
Feedlot Placements Down Near 9%
Markets will likely view Friday’s monthly Cattle on Feed report as at least neutral, with slightly fewer November placements and slightly more marketings than expected.
Placements in November of 1.91 million head were 187,000 head fewer (-8.9%) than the prior year, compared to average expectations of 8.2% less, according to the Urner Barry Survey shared by the Daily Livestock Report.
Marketings in November of 1.78 million head were 31,000 head fewer (-1.7%); pre-report expectations were for a decline of 2.1%.
Total cattle on feed in yards with 1,000 or more capacity, as of Dec. 1, were 12.04 million head, just 5,000 head more (+0.04%) than the previous year. Expectations ahead of the report were for no change.
Fed Cattle Prices Waver
Negotiated cash fed cattle prices ended steady in the Southern Plains last week at $108/cwt., but lower in the North. Live prices were $1-$2 lower in Nebraska at $105 and $1 lower in the western Corn Belt at $105. Dressed trade was $3 lower at $165.
Live Cattle futures closed an average of $1.28 higher week to week on Friday, from 85¢ to $1.72 higher in spot Dec.
Although it appears the backlog of fed cattle created by pandemic disruptions is past, mostly mild weather until recently continues to buoy feedlot cattle performance.
The average dressed steer weight the week ending Dec. 5 was 922 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week and 16 lbs. heavier than the prior year. The average dressed heifer weight of 850 lbs. was the same as a week earlier but 10 lbs. heavier than the previous year.
ERS projected the average fourth-quarter, five-area direct fed steer price $1 lower at $108. However, they forecast next year’s average price $1 higher at $115.
Specifically, fed steer prices are forecast to be $113 in the first and second quarters and $114 in the third quarter.
Wholesale beef values continued their seasonal slide last week but showed signs of nearing the bottom. Choice boxed beef cutout value was $5.25 lower week to week on Friday at $208.63/cwt. Select was $1.44 lower at $194.27.
Friday to Friday Change
Weekly Auction Receipts
| Dec. 18 | Auction | Direct |
Video/net |
Total |
|
237,200 (-117,500) |
42,000 (+15,000) |
26,700 (+18,200) |
305,900 (-84,300) |
CME Feeder Index
| CME Feeder Index* | Dec. 17 | Change |
| $138.48 | + $1.82 |
*Wednesday-to Wednesday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec.18 | Change |
| 600-700 lbs. | $155.50 | + $4.76 |
| 700-800 lbs. | $145.61 | + $4.19 |
| 800-900 lbs. | $138.99 | + $2.30 |
South Central
| Steers-Cash | Dec. 18 | Change |
| 500-600 lbs. | $157.26 | + $1.32 |
| 600-700 lbs. | $144.79 | + $3.10 |
| 700-800 lbs. | $137.63 | + $1.96 |
Southeast
| Steers-Cash | Dec. 18 | Change |
| 400-500 lbs. | $154.44 | – $1.11 |
| 500-600 lbs. | $139.60 | + $1.12 |
| 600-700 lbs. | $128.67 | + $0.28 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 18 ($/cwt) | Change |
| Choice | $208.63 | – $5.25 |
| Select | $194.27 | – $1.44 |
| Ch-Se Spread | $14.36 | – $3.81 |
Futures
| Feeder Cattle | Dec. 18 | Change |
| Jan ’21 | $140.450 | + $0.725 |
| Mar | $142.300 | + $1.750 |
| Apr | $143.900 | + $2.000 |
| May | $144.775 | + $2.350 |
| Aug | $150.100 | + $2.275 |
| Sep | $149.900 | + $1.950 |
| Oct ’21 | $149.550 | + $1.825 |
| Nov | $148.500 | + $1.200 |
| Live Cattle | Dec. 18 | Change |
| Dec | $110.475 | + $1.725 |
| Feb ’21 | $114.850 | + $1.600 |
| Apr | $118.650 | + $1.275 |
| Jun | $114.075 | + $1.475 |
| Aug | $113.475 | + $1.500 |
| Oct | $116.275 | + $1.075 |
| Dec | $118.500 | + $0.850 |
| Feb ’22 | $120.100 | + $0.975 |
| Apr | $120.875 | + $1.050 |
| Corn | Dec. 18 | Change |
| Mar ’21 | $4.374 | + $0.140 |
| May | $4.392 | + $0.128 |
| Jly | $4.396 | + $0.114 |
| Sep | $4.230 | + $0.090 |
| Oct | $4.184 | + $0.062 |
| Mar ’22 | $4.234 | + $0.058 |
| Oil CME-WTI | Dec. 18 | Change |
| Jan ’21 | $49.10 | + $2.53 |
| Feb | $49.24 | + $2.49 |
| Mar | $49.34 | + $2.47 |
| Apr | $49.40 | + $2.44 |
| May | $49.40 | + $2.40 |
| Jun | $49.33 | + $2.36 |
Equities
| Equity Indexes | Dec. 18 | Change |
| Dow Industrial Average | 30179.05 | + 132.68 |
| NASDAQ | 12755.64 | + 377.77 |
| S&P 500 | 3709.41 | + 46.18 |
| Dollar (DXY) | 89.92 | – 1.06 |