Calves and feeder cattle traded mixed last week with heavier receipts and a firmer tone across much of the key trade areas.
Steers and heifers sold from steady to $2/cwt. lower in the North Central part of the country. Prices were to steady to $4 higher in the Southeast and South Central areas, according to the Agricultural Marketing Service (AMS).
“Some auctions in the southern areas reported spots up to as much as $10
higher on what would be considered cattle suitable for grazing. Demand for those kind is expected to be good in anticipation of grass,” say AMS analysts. “Most grazing areas are not showing any signs of drought stress currently.”
However, there appears to be less wheat pasture than originally anticipated.
Winter wheat planted area for harvest in 2019 is estimated at 31.3 million acres, down 4% from last year and down 4% from 2017, according to the Winter Wheat and Canola Seedings report.
“This represents the second lowest United States acreage on record,” say analysts with the National Agricultural Statistics Service (NASS). “Seedings, which began in early September, fell behind the 5-year average seeding pace in early October and remained behind the 5-year average seeding pace for the duration of the planting season. Seeding was mostly complete by November 11.”
Year to year, winter wheat area seeded is 6% less in Kansas, 5% less in Oklahoma but on par in Texas.
“Despite the optimism in the cash market, there continues to be some trepidation in the futures market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The market has been moving sideways for three straight months and there is no sign of it breaking out in either direction. Moving from March through August, the seasonal expectation is priced in the market with August feeder cattle futures trading $7 higher than the March contract. This does provide a little solace, but it does not provide many opportunities for price risk management.”
Week to week on Friday Feeder Cattle futures closed an average of $1.74 higher (62¢ to $2.30 higher).
Fed Cattle Prices Appeared Steady to Higher
Negotiated cash fed cattle trade ended up last week $1 higher on a live basis at $125/cwt. in the Southern Plains and $1.00-$1.50 higher in the north at $124.50-$126.00. Dressed sales were up to $3 higher at $200.
Week to week on Friday, Live Cattle futures closed an average of $1.48 higher (95¢ to $1.95 higher).
“Live cattle futures would suggest prices will continue to move sideways into April, but untethered optimism holds the hope that prices will increase a few more dollars heading towards grilling season,” Griffith says.
In the meantime, the recent reopening of USDA’s data spigot offers some indication of how much winter weather is impacting carcass weights.
Dressed steers weights for the week ending Jan. 5 were 6 lbs. lighter year over year at 896 lbs., according to the Actual Slaughter Under Federal Inspection report. Dressed heifer weights were 8 lbs. lighter at 892 lbs. A week earlier, year over year, dressed steer weights were 9 lbs. lighter and dressed heifer weights were 13 lbs. lighter.
Analysts with USDA’s Economic Research Service project fed steer prices for at $122-$126/cwt. for the first quarter, $119-$127 in the second, $109-$119 in the third and at $108-$118 in the fourth. That’s from the February World Agricultural Supply and Demand Estimates (WASDE).
Wholesale beef values were mixed. Week to week on Friday, Choice boxed beef cutout value was $1.09 higher at $215.35/cwt. Select was $1.98 lower at $211.17.
Total beef production for last year was revised down 75 million lbs. from the December estimate to 26.86 billion lbs., according to WASDE. That’s just shy of the historic record, but still 677 million lbs. more than the previous year (+2.6%).
Likewise, estimated beef production for this year was revised down by 175 million lbs. to a record-large 27.61 billion lbs.
“Preliminary Yearly Federally Inspected Slaughter cattle numbers for 2018 showed a 2.6% increase over 2017 and a 7.2% larger harvest over the previous five-year average,” say AMS analysts. “Total cow slaughter in 2018 was 7.0% over year ago and 10.4% over the previous five-year average. Beef cow slaughter showed the way with an 8.6% larger number than a year ago and 14.1% larger than the previous five-year average.”
“Prices of calves, feeder cattle, and slaughter cows are in no way considered strong by those who are selling, but the prices are showing improvement which brings optimism,” Griffith says. “The most favorable aspect of the market may be that seasonal price trends continue to work their way into the market, which can aid producers in decision making because they can use seasonal expectations for purchasing and selling. This is important because seasonal trends for many classes of cattle were shot out of the air during the marketing years 2014 through 2016.”
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Feb. 7||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$159.44||– 1.84|
|700-800 lbs.||$147.62||– 1.66|
|800-900 lbs.||$142.40||+ 0.10|
|500-600 lbs.||$166.92||+ 3.19|
|600-700 lbs.||$151.52||+ 3.02|
|700-800 lbs.||$142.22||+ 1.04|
|400-500 lbs.||$160.36||+ 0.82|
|500-600 lbs.||$148.72||– 0.80|
|600-700 lbs.||$138.60||+ 0.19|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Feb. 8 ($/cwt)||Change|
|Ch-Se Spread||$4.18||+ $3.07|
|Feeder Cattle||Feb. 8||Change|
|Jan ’20||$147.600||+ $0.625|
|Live Cattle||Feb. 8||Change|
|Feb ’19||$127.375||+ $1.925|
|Feb ’20||$119.400||+ $1.125|
|Corn futures||Feb. 8||Change|
|Mar ’19||$3.742||– $0.040|
|Mar ’20||$4.086||– $0.026|
|Oil CME-WTI||Feb. 8||Change|
|Equity Indexes||Feb. 8||Change|
|Dow Industrial Average||25106.33||+ 42.44|
|S&P 500||2707.88||+ 1.35|
|Dollar (DXY)||96.64||+ 1.07|