Steer and heifer calves and yearlings sold $2/cwt. on each side of steady last week, according to the Agricultural Marketing Service (AMS).
“There was a great deal of optimism in the cattle complex as the week started. With the holidays upon us, the week represented the last marketing opportunity in 2017,” said AMS analysts. “Very few auctions will hold sales next week as buyers, feedyards, and auction market personnel take a break after the last few weeks of hard-running at auctions.”
Feeder Cattle futures closed an average of $5.73 lower week to week on Friday ($4.20 to $7.00 lower).
Andrew P. Griffith, agricultural economist at the University of Tennessee provided further perspective in his weekly market comments relative to the divergence between cash prices and Feeder Cattle futures heading into Friday’s report.
“Since Jan. 1 of 2012, the basis between the CME Feeder Cattle Index and the nearby feeder cattle futures contract (Index – Futures = Basis) has ranged from nearly a negative $14 to a positive $15, with the average basis being a positive $0.69,” Griffith says. “The basis between the Feeder Cattle Index and January feeder cattle futures has averaged a little over a positive $7.50 the past couple of weeks. The market has seen a similar positive basis being sustained in the late November and December time periods of 2014 and 2015. However, the following action differed by the year. Following strong basis values at the end of 2014, basis values continued to be strong into January 2015. Alternatively, following strong basis in late 2015, the basis turned severely negative and then moved more towards the average basis in early 2016. The key, though, is that futures prices moved higher in each case. Thus, the expectation moving into January is for the basis on feeder cattle to soften but the softening is expected to come from firming feeder cattle futures and steady cash prices in the country. What this means is that sellers should be cautious using the futures market to hedge marketings in the next month. Alternatively, buyers might benefit from gains in the futures while the cash price sits steady.”
Negotiated cash fed cattle prices were mainly steady on a live basis last week at $120/cwt. Dressed prices were steady to $2 higher at $190-$191.
Except for 92¢ higher in spot Dec, Live Cattle futures closed an average of $2.76 lower week to week on Friday ($1.90 to $3.57 lower).
Choice boxed beef cutout value was $2.31 lower week to week on Friday at $199.56; Select was $4.62 higher at $187.88.
Although cash prices remained resilient across the cattle complex last week, futures fluctuated with increasing uncertainty, then turned bearish with Friday’s Cattle on Feed report.
There were 13.9% more cattle placed on feed than a year earlier (2.1 million head), which was about 9% more than expectations.
Plus, AMS analysts say, “With less wheat pasture available to graze this year, many cattle have made their way or are going to make their way to feedyards in pretty short order.”
Marketings were 1.84 million head (+3.2%). Total cattle on feed Dec. 1 for feedlots with 1,000 head or more capacity ( 11.52 million head) was 8.1% more than a year earlier.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Dec. 22 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
133,600 (-110,200) |
22,200 (+1,200) |
1,200 (-15,700) |
157,000 (-127,100) |
CME Feeder Index
| CME Feeder Index | Dec. 21 | Change |
| $149.92 | -4.48 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec. 22 | Change |
| 600-700 lbs. | $167.26 | + $0.26 |
| 700-800 lbs. | $162.31 | + $1.70 |
| 800-900 lbs. | $154.08 | – $1.39 |
South Central
| Steers-Cash | Dec. 22 | Change |
| 500-600 lbs. | $163.93 | – $1.42 |
| 600-700 lbs. | $153.58 | – $1.42 |
| 700-800 lbs. | $149.05 | – $0.06 |
Southeast
| Steers-Cash | Dec. 22 | Change |
| 400-500 lbs. | $160.69 | + $0.59 |
| 500-600 lbs. | $151.41 | – $0.94 |
| 600-700 lbs. | $141.62 | – $3.66 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 22 ($/cwt) | Change |
| Choice | $199.56 | – $2.31 |
| Select | $187.88 | + $4.62 |
| Ch-Se Spread | $11.68 | – $6.94 |
Futures
| Feeder Cattle | Dec. 22 | Change |
| Jan ’18 | $141.550 | – $6.200 |
| Mar | $138.550 | – $7.000 |
| Apr | $139.450 | – $6.475 |
| May | $139.350 | – $6.300 |
| Aug | $142.700 | – $5.350 |
| Sep | $142.675 | – $5.175 |
| Oct | $141.875 | – $5.175 |
| Nov | $141.550 | – $4.200 |
| Live Cattle | Dec. 22 | Change |
| Dec | $119.825 | + $0.925 |
| Feb ’18 | $118.575 | – $2.450 |
| Apr | $119.275 | – $2.875 |
| Jun | $111.150 | – $3.575 |
| Aug | $108.150 | – $3.250 |
| Oct | $109.075 | – $2.875 |
| Dec | $110.950 | – $2.825 |
| Feb ’19 | $112.225 | – $2.375 |
| Apr | $112.600 | – $1.900 |
| Corn futures | Dec. 22 | Change |
| Mar ’18 | $3.520 | + $0.046 |
| May | $3.604 | + $0.048 |
| Jul | $3.686 | + $0.044 |
| Sep | $3.760 | + $0.048 |
| Dec | $3.844 | + $0.044 |
| Mar ’19 | $3.940 | + $0.044 |
| Oil CME-WTI | Dec. 22 | Change |
| Feb | $58.47 | + $1.14 |
| Mar | $58.54 | + $1.30 |
| Apr | $58.54 | + $1.42 |
| May | $58.48 | + $1.51 |
| Jun | $58.34 | + $1.57 |
| Jul | $58.12 | + $1.62 |
Equities
| Equity Indexes | Dec. 22 | Change |
| Dow Industrial Average | 24654.06 | + 2.32 |
| NASDAQ | 6959.96 | + 23.38 |
| S&P 500 | 2683.34 | + 7.53 |
| Dollar (DXY) | 93.32 | – 0.61 |