Cash prices for calves and feeder cattle continued to follow Cattle futures higher as producers and traders considered the slowing expansion of the beef cowherd (see below) in tandem with expanding drought and early-placed cattle.
Steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS).
“Buyers bid readily from start to finish nationwide for the heavy supply of mostly weaned calves and feeder cattle on offer,” AMS analysts said. “At a few auctions in the Northern Plains, demand was noticeable on top-quality replacement heifers.”
Feeder Cattle futures closed an average $3.95 higher week to week on Friday.
“There has been less volatility in cash markets and a more steady hand as stocker operators and feedlot managers continue to be active participants in the calf and feeder cattle markets,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
When all was said and done last week, cash fed cattle sales were steady to $1 lower at mostly $126/cwt. on a live basis; steady in the beef at $200.
Live Cattle futures closed an average of $1.84 higher week to week on Friday ($1.00 to $2.42 higher).
Likewise, wholesale beef values continued to edge higher. Choice boxed beef cutout value was $2.27 higher week to week on Friday at $209.10. Select was $1.62 higher at $203.45.
“January and February tend to be poor demand months for beef relative to other months of the year,” Griffith says. “However, packers have been able to push wholesale beef prices higher, even with strong weekly beef production. Beef production the first four weeks of 2018 is 3.4% greater than the same weeks in 2017, while wholesale Choice boxed beef prices have been $6 to $17 higher than year-ago prices…All current information is very supportive of strong beef prices with continued strong exports, strong domestic consumption, and economic factors supporting increased disposable income for consumers.”
Herd Expansion Slowing
The nation’s beef cowherd continued to expand last year at a slowing rate, according to the USDA Cattle report.
There were 31.72 million beef cows to start the year. That’s 509,800 head more (+0.74%) than Jan. 1 of 2017.
There were 6.13 million beef replacement heifers, which was 3.72% less than at the beginning of last year.
The total inventory of all cows and calves Jan. 1 was 93.70 million head, which was 0.74% more than the previous year.
AMS analysts point out total cattle numbers are the largest in nine years.
Based on futures price trends following the report, traders view the report as friendly.
One other insight from the Cattle report.
“With the recent drought conditions in the Southern Plains, cattle have been moving off wheat and winter pastures at a pretty good clip,” AMS analysts say. “The 1.5 million head listed as grazing small-grain pasture is the lowest total since January 2013, when the severe drought in fall of 2012 was realized.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Feb. 02 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
282,200 (-1,200) |
43,700 (-40,100) |
1,000 (-19,200) |
326,900 (-60,500) |
CME Feeder Index
| CME Feeder Index | Feb. 01 | Change |
| $148.03 | + 0.97 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Feb. 02 | Change |
| 600-700 lbs. | $171.52 | + $2.13 |
| 700-800 lbs. | $155.98 | + $1.80 |
| 800-900 lbs. | $147.19 | + $1.13 |
South Central
| Steers-Cash | Feb. 02 | Change |
| 500-600 lbs. | $173.30 | + $0.76 |
| 600-700 lbs. | $158.77 | – $0.48 |
| 700-800 lbs. | $147.96 | – $0.37 |
Southeast
| Steers-Cash | Feb. 02 | Change |
| 400-500 lbs. | $171.31 | + $1.28 |
| 500-600 lbs. | $159.07 | + $1.81 |
| 600-700 lbs. | $147.31 | + $1.68 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Feb. 02 ($/cwt) | Change |
| Choice | $209.10 | + $2.27 |
| Select | $203.45 | + $1.62 |
| Ch-Se Spread | $5.65 | + $0.65 |
Futures
| Feeder Cattle | Feb. 02 | Change |
| Mar | $150.925 | + $4.200 |
| Apr | $151.775 | + $4.550 |
| May | $151.775 | + $4.725 |
| Aug | $154.075 | + $4.025 |
| Sep | $153.925 | + $3.575 |
| Oct | $153.700 | + $3.050 |
| Nov | $153.350 | + $3.375 |
| Jan ’19 | $150.325 | + $4.075 |
| Live Cattle | Feb. 02 | Change |
| Feb | $126.850 | + $2.250 |
| Apr | $126.125 | + $1.500 |
| Jun | $118.000 | + $1.825 |
| Aug | $114.975 | + $1.925 |
| Oct | $116.675 | + $2.425 |
| Dec | $118.175 | + $1.800 |
| Feb ’19 | $118.500 | + $1.000 |
| Apr | $118.375 | + $1.425 |
| Jun | $112.000 | + $2.425 |
| Corn futures | Feb. 02 | Change |
| Mar | $3.614 | + $0.050 |
| May | $3.694 | + $0.044 |
| Jul | $3.772 | + $0.040 |
| Sep | $3.844 | + $0.038 |
| Dec | $3.924 | + $0.030 |
| Mar ’19 | $4.004 | + $0.020 |
| Oil CME-WTI | Feb. 02 | Change |
| Mar | $65.45 | – $0.69 |
| Apr | $65.07 | – $0.90 |
| May | $64.61 | – $1.06 |
| Jun | $64.11 | – $1.15 |
| Jul | $63.55 | – $1.21 |
| Aug | $62.95 | – $1.25 |
Equities
| Equity Indexes | Feb. 02 | Change |
| Dow Industrial Average | 25520.96 | – 1095.75 |
| NASDAQ | 7240.95 | – 264.82 |
| S&P 500 | 2762.13 | – 110.74 |
| Dollar (DXY) | 89.19 | + 0.18 |