Cattle Current Weekly Highlights—Week ending Dec. 25, 2020

Cattle Current Weekly Highlights—Week ending Dec. 25, 2020

Editor’s note: Due to the holiday, there was no weekly regional price or summary auction data from the Agricultural Marketing Service last week. Come January, AMS will begin releasing weekly data on Monday rather than Friday. Cattle Current will adjust accordingly.

Given the Christmas holiday, calf and feeder cattle trade was sparse last week, so there were no trends. A week earlier, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS).

“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,” said Andrew P. Griffith, agricultural economist at the University of Tennessee, in his Dec. 18 weekly market comments.

Feeder Cattle futures closed an average of 46¢ higher week to week on Thursday (previous Friday through Thursday), except for 10¢ lower in Aug. That was in the face of continued strengthening in grain prices.

For instance, Corn futures closed an average of 9¢ higher week to week on Thursday (previous Friday through Thursday) through the front six contracts. Soybean futures closed an average of 42¢ higher.

Fed Cattle Prices Strengthen

Expectations for firmer to higher wholesale beef values helped underpin market support last week.

Choice boxed beef cutout value was $1.09 lower on Wednesday; compared to the previous Friday at $207.54/cwt. Select was $3.66 higher at $197.93.

Negotiated cash fed cattle was not reported Thursday or Friday. On Wednesday, prices were $2 higher in the Southern Plains at $110/cwt., according to the Agricultural Marketing Service. There were some early dressed sales in Nebraska and the western Corn Belt at $172; a few live sales in the western Corn Belt at $110. Trade in those regions the previous week was at mostly $105 on a live basis and mostly $165 in the beef.

Live Cattle futures closed an average of 71¢ higher week to week on Thursday (previous Friday through Thursday), from 12¢ higher to $1.67 higher in spot Dec.

Higher aforementioned feed costs lowered projected feedlot returns for the majority of the next nine months, in the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU).

Keep in mind that the following projections assume no price risk management.

From December through August of next year, KSU projected positive returns, ranging from an estimated +$14.99 per head in December to +$91.11 in May, with estimated feedlot cost of gain (FCOG) ranging from $84.67/cwt. (Dec.) to $91.11 in May.

Conversely, KSU projects losses in five of those nine months, ranging from -$6.28 per head in August to -$47.92 in July, with FCOG in those months ranging from $86.14/cwt. in January to $92.38 in April.

At the same time, feedlot flows should stabilize going forward, compared to the volatility spawned by pandemic disruptions seen for much of the year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

For instance, in his weekly market comments, Peel explained, “Monthly feedlot placements varied from 23% lower year over year in March to 11% higher in July, to 11% lower in October.” For January through November, he says total placements were 4.4% less year over year, but were 0.5% more than last year for the last six months.

“Placements below a year ago in October and November helped greatly reduce inventories on feed. October placements were down by more than 10%, and November settled in at 9% below 2019,” say analysts with the Livestock Marketing Information Center (LMIC), reflecting on last week’s monthly Cattle on Feed report.

“From a placement perspective, December auction volumes of feeder cattle receipts appear to have increased from December of last year, but border crossings of feeder cattle from Mexico continue to be below a year ago,” LMIC analysts explain, in the latest Livestock Monitor. “The five-year average indicates December placements drop about 15% from November levels. Given November’s already low placements, expect December 2020 placements to have a restrained seasonal move compared to the five-year average.”

“With herd inventories continuing to drift lower, total cattle numbers should be generally supportive of cattle prices in 2021,” Peel says.

Friday to Friday Change

Weekly Auction Receipts

Prior week…

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

Thursday through Wednesday…

CME Feeder Index* Dec. 23 Change
  $139.82 +  $0.26

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Prior week…

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

 

Prior week…

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

 

Prior week…

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

Friday through Wednesday…

Boxed Beef  (p.m.) Dec. 23 ($/cwt) Change
Choice $207.54 –  $1.09
Select $197.93 + $3.66
Ch-Se Spread $9.62 –  $4.74

 

Futures

Friday through Thursday…

Feeder Cattle  Dec. 24 Change
Jan ’21 $140.925 + $0.475
Mar $142.325 + $0.025
Apr $143.925 + $0.025
May $145.225 + $0.450
Aug $150.000 –  $0.100
Sep $150.475 + $0.575
Oct ’21 $150.025 + $0.475
Nov $149.700 + $1.200

 

Friday through Thursday…

Live Cattle   Dec. 24 Change
Dec $112.150 + $1.675
Feb ’21 $114.975 + $0.125
Apr $118.975 + $0.325
Jun $114.475 + $0.400
Aug $113.925 + $0.450
Oct $116.975 + $0.700
Dec $119.475 + $0.925
Feb ’22 $120.925 + $0.825
Apr $121.800 + $0.925

 

Friday through Thursday…

Corn  Dec. 24 Change
Mar ’21 $4.510 + $0.136
May $4.516 + $0.124
Jly $4.502 + $0.106
Sep $4.300 + $0.070
Oct $4.244 + $0.060
Mar ’22 $4.286 + $0.052

 

Friday through Thursday…

Oil CME-WTI Dec. 24 Change
Feb $48.23 –  $1.01
Mar $48.35 –  $0.99
Apr $48.43 –  $0.97
May $48.45 –  $0.95
Jun $48.43 –  $0.90
Jly $48.34 –  $0.87

 

Equities

Friday through Thursday…

Equity Indexes Dec. 24 Change
Dow Industrial Average  30199.87 +  20.82
NASDAQ  12804.73 +  49.09
S&P 500   3703.06 –      6.35
Dollar (DXY)       90.22 +     0.20
2020-12-27T14:58:51-05:00

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