Although winter weather continued to limit auction receipts, calf and feeder cattle prices finally bounced higher last week. Nationwide, steers and heifers sold $1-$4/cwt. higher with instances of $6 higher, according to the Agricultural Marketing Service (AMS).
“The big story was the Polar Vortex that encompassed 70% of the United States population with freezing and below freezing temperatures,” say AMS analysts. “Mid-week travel was brutal on both man and beast; some auctions either rescheduled due to the cold or cancelled.”
Not counting recently minted away Jan, Feeder Cattle futures closed an average of 62¢ lower (22¢ to $1.10 lower in spot Mar).
“The increase in auction prices this week had little to do with stronger feeder cattle futures as futures continue to trade sideways as they have done for three months,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The most likely factor that supported prices was stocker producers attempting to get a few spring grass cattle purchased prior to the seasonal price increase.”
At their annual Outlook Seminar last week, CattleFax analysts said they expect steer calf prices (550 lbs.) to average about $164/cwt. this year, about $9 less than last year. They anticipate prices could increase to the mid $180s in the spring, and could erode to $140 in the fall.
CattleFax projects feeder steer (750 lbs.) prices this year at an average $147/cwt., down about $3 from last year. They expect a trading range of $130-$160.
Fed Cattle Prices Appeared Steady to Higher
Negotiated cash fed cattle prices ended up last week at steady money to a little higher with moderate trade and demand on Friday. Live prices were $1 higher at $124/cwt., except for steady in the western Corn Belt at $123-$126. Dressed sales were steady to $3 higher at $197-$200.
Week to week on Friday, Live Cattle futures closed an average of 47¢ lower.
“Cattle feeders have their eyes set on year-ago prices, which nearly reached $130, based on the 5-area weighted average price during the third week of February and stayed near $126 or higher through the end of March,” Griffith says. “The key this year will be for cattle feeders to maintain prices in the mid $120 area or higher for April and into May. The little bit of leverage they have now will help.”
CattleFax projects the average fed steer price this year at $117/cwt., with downside risk to $100 and upside resistance at around $130.
Incidentally, CattleFax analysts say feed and grain prices are expected to remain stable this year, with corn acreage increasing an expected 2 million acres to total 91 million acres and soybeans declining 2.2 million acres to 87 million acres.
“Corn is expected to trade in a range of $3.60 to $4.10/bu. during the first half of the year,” according to CattleFax analyst Mike Murphy. He added that hay acreage isn’t expected to change significantly from last year, but increased winter precipitation across much of the United States should help provide a strong start to the 2019 hay crop.
Wholesale beef prices were mixed. Week to week on Friday, Choice boxed beef cutout value was $2.75 lower at $214.26/cwt. Select was $1.12 higher at $213.15.
“The comprehensive cutout is 3% ahead of a year ago in the month of January, averaging $213.21/cwt.,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The end of the holiday season should have brought about seasonally higher chuck and round primal values, but in the first four weeks of the year, chuck, round, and flank primal values have been the only cuts lagging.”
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Jan. 31||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$161.28||+ 3.58|
|700-800 lbs.||$149.28||+ 2.31|
|800-900 lbs.||$142.30||+ 0.88|
|500-600 lbs.||$163.73||+ 1.94|
|600-700 lbs.||$148.51||+ 1.93|
|700-800 lbs.||$141.18||+ 0.36|
|400-500 lbs.||$159.54||+ 6.66|
|500-600 lbs.||$149.52||+ 4.18|
|600-700 lbs.||$138.41||+ 2.81|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Feb. 1 ($/cwt)||Change|
|Ch-Se Spread||$1.11||– $3.87|
|Feeder Cattle||Feb. 1||Change|
|Live Cattle||Feb. 1||Change|
|Feb ’19||$125.450||– $0.600|
|Feb ’20||$118.275||– $0.375|
|Corn futures||Feb. 1||Change|
|Mar ’19||$3.782||– $0.020|
|Mar ’20||$4.112||– $0.008|
|Oil CME-WTI||Feb. 1||Change|
|Equity Indexes||Feb. 1||Change|
|Dow Industrial Average||25063.89||+ 326.69|
|S&P 500||2706.53||+ 41.77|
|Dollar (DXY)||95.57||– 1.01|