Cash and futures cattle prices emerged from the Thanksgiving holiday with mixed signals, tied in part to wonderments about beef demand following the year-end holidays.
Nationwide, calves and feeder cattle sold from $2/cwt. lower to $3 higher, compared to two weeks earlier, according to the Agricultural Marketing Service (AMS).
“Calves suitable for grazing, coming out of the Southeast, showed the most price support,” say AMS analysts. “Yearlings were still in demand, but at a lower price point than before the Thanksgiving Day holiday.”
Feeder Cattle futures closed an average of 36¢ higher week to week on Friday, except for 5¢ and 7¢ lower at either end of the board. They were helped along by month-end profit taking that left Corn futures an average of 10¢ lower through the front six contracts, week to week on Friday.
AMS analysts note feedlots are currently penciling cost of gain at around $1/lb. At the same time, they point our spot Live Cattle futures ended the week $11.32 lower year over year; $12.57 lower for Feb.
“The premium on preconditioned cattle will not deteriorate moving forward, but all calf prices will strengthen moving into 2021. The market is expected to heat up in the middle of February and moving through the end of April,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf market naturally leads into the feeder cattle market which is also expected to strengthen in 2021. Recent yearling cattle prices have not been bad, but they have been hampered by the number of cattle on feed and many feedlots being full.”
Fed Cattle Trade Unevenly Steady
For the week, negotiated cash fed cattle prices were $1 lower to $1 higher on a live basis in the Texas Panhandle at $110-$112/cwt. They were $1 lower in Kansas at $110. Live prices were steady to $1 lower in Nebraska at $109-$110 and steady to $1 lower in the western Corn Belt at $109. Dressed trade was steady to $2 lower at $172-$174.
“The hope of hitting $115 before the end of the year is diminishing quickly for finished cattle. They held their ground the past couple of weeks, but they could not find any traction to push higher. It is beginning to get a little late in the year for holiday beef buying to provide a significant boost to the aforementioned price level,” Griffith says. “There will most likely be a surge in beef purchases to restock the meat counter if consumers pull on beef for Christmas and New Year’s, but there is no guarantee it will provide significant support to push cattle prices higher. The expectation at this point, through the end of the year, is for finished cattle prices to trade steady with $1 to $2 swings possible in either direction.”
Live Cattle futures closed an average of 86¢ lower week to week on Friday, from 22¢ lower to $1.75 lower in spot Dec, except for 17¢ to 30¢ higher in the back two contracts.
AMS analysts point out that a year ago last week was the first one that the Tyson plant in Holcombe, KS reopened following the fire that shuttered it the previous August.
Beef Prices Take Seasonal Turn
If last week is any indication, the seasonal surge in wholesale beef values has about run its course.
Choice boxed beef cutout value was $7.83 lower week to week on Friday at $235.02/cwt. Select was $3.17 lower at $217.51.
The average steer carcass weight for the week ending Nov. 21 was 923 lbs., which was 7 lbs. lighter than the previous week but 12 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average heifer carcass weight was 847 lbs., which was 1 lb. heavier than the prior week and 5 lbs. heavier than the previous year.
“What appeared to be happening was some last-minute holiday purchases and some purchases to fulfill consumer demand when January and February arrive,” Griffith explains. “There is a good chance that there will be some good deals on Choice roasts relative to Select roasts moving into the middle of winter. Many folks in the industry have made comments about consumer demand and if it will persist. Given the past eight or nine months, one would have to assume that consumers will continue to demand beef. The relatively strong demand will support beef prices through the winter. Another round of government aid to the general public would also go a long way to promoting beef movement. Such aid simply adds to disposable income.”
Friday to Friday Change
Weekly Auction Receipts
| Dec. 4 | Auction | Direct |
Video/net |
Total |
|
278,600 (+166,300) |
34,500 (-800) |
60,000 (+58,400) |
373,100 (+223,900) |
CME Feeder Index
| CME Feeder Index* | Dec. 3 | Change |
| $139.18 | + $1.62 |
*Wednesday-to Wednesday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Dec.4 | Change |
| 600-700 lbs. | $152.37 | + $5.26 |
| 700-800 lbs. | $143.73 | + $2.57 |
| 800-900 lbs. | $140.99 | – $1.63 |
South Central
| Steers-Cash | Dec. 4 | Change |
| 500-600 lbs. | $154.24 | + $4.74 |
| 600-700 lbs. | $141.47 | + $0.07 |
| 700-800 lbs. | $137.29 | – $2.94 |
Southeast
| Steers-Cash | Dec. 4 | Change |
| 400-500 lbs. | $154.17 | + $7.58 |
| 500-600 lbs. | $140.34 | + $3.50 |
| 600-700 lbs. | $130.22 | + $0.42 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Dec. 4 ($/cwt) | Change |
| Choice | $235.02 | – $7.83 |
| Select | $217.51 | – $3.17 |
| Ch-Se Spread | $17.51 | – $4.66 |
Futures
| Feeder Cattle | Dec. 4 | Change |
| Jan ’21 | $139.775 | – $0.050 |
| Mar | $139.425 | + $0.425 |
| Apr | $140.775 | + $0.450 |
| May | $141.625 | + $0.400 |
| Aug | $146.850 | + $0.650 |
| Sep | $146.550 | + $0.100 |
| Oct ’21 | $146.500 | + $0.150 |
| Nov | $146.525 | – $0.075 |
| Live Cattle | Dec. 4 | Change |
| Dec | $108.875 | – $1.750 |
| Feb ’21 | $112.400 | – $0.850 |
| Apr | $116.175 | – $0.775 |
| Jun | $111.050 | – $0.850 |
| Aug | $110.625 | – $0.725 |
| Oct | $114.450 | – $0.225 |
| Dec | $117.175 | + $0.175 |
| Feb ’22 | $118.675 | + $0.300 |
| Apr | $119.150 | -0- |
| Corn | Dec. 4 | Change |
| Dec | $4.170 | – $0.084 |
| Mar ’21 | $4.204 | – $0.132 |
| May | $4.232 | – $0.134 |
| Jly | $4.240 | – $0.132 |
| Sep | $4.104 | – $0.070 |
| Oct | $4.102 | – $0.042 |
| Oil CME-WTI | Dec. 4 | Change |
| Jan ’21 | $46.26 | + $0.73 |
| Feb | $46.42 | + $0.68 |
| Mar | $46.54 | + $0.63 |
| Apr | $46.60 | + $0.59 |
| May | $46.61 | + $0.55 |
| Jun | $46.56 | + $0.49 |
Equities
| Equity Indexes | Dec. 4 | Change |
| Dow Industrial Average | 30218.26 | + 307.89 |
| NASDAQ | 12464.23 | + 258.38 |
| S&P 500 | 3699.12 | + 60.77 |
| Dollar (DXY) | 90.81 | – 0.98 |