Cattle Current Weekly Highlights—Week ending Feb. 12, 2021

Cattle Current Weekly Highlights—Week ending Feb. 12, 2021

Based on weekly auctions monitored by Cattle Current, calves and feeder cattle traded mixed last week, supported by positive fundamentals but pressured by the frigid, icy weather that disrupted some markets.

Week to week on Friday, Feeder Cattle futures closed an average of $1.29 higher from 17¢ higher at the back to $2.57 higher at the front. Slightly softer Corn futures prices provided support.

Week to week on Friday, Corn futures closed an average of 7¢ lower through the front six contracts.

The latest monthly World Agricultural Supply and Demand Estimates (WASDE), from USDA’s Economic Research Service increased the expected 2020-21 season-average corn price received by producers by 10¢ to $4.30/bu. 

“The futures price expectation for feeder cattle remains a bright spot, as the market appears to be strong in the summer and fall months for moving cattle into the feedlot,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Most feeder cattle contracts are holding near the contract highs. This does not mean they will stay there, nor does it mean the market price will increase or decrease. All it means at this point is that optimism remains in the feeder cattle market…There are still several weeks before spring forage growth hits full speed. Thus, there should still be several more weeks before lightweight calf prices peak. However, the cost of holding those calves for four to eight more weeks should be considered.”

Cash Fed Cattle Trade Steady to Higher

Negotiated cash fed cattle trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher).

“The cash price remains $2 lower than the February Live Cattle contract, and there are two weeks left to close the gap,” Griffith says. “The more optimistic part of the market is April Live Cattle trading near $125. The ability to reach or surpass this price level is dependent on beef demand. Beef supply may play a role as well if the extremely cold temperatures persist and result in reduced cattle performance in the feedlot.”

The average dressed steer weight the week ending Jan. 30 was 920 lbs., which was 6 lbs. lighter than the previous week but 23 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 853 lbs. was 2 lbs. heavier than the prior week and 20 lbs. heavier than the previous year.

USDA projects $115/cwt. for the annual average five-area direct fed steer price this year. Average prices are forecast at $113 in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter.

Increased Beef Production Expected

Choice boxed beef cutout value was $2.21 lower week to week on Friday at $232.37/cwt. Select was 14¢ higher at $220.93.

Beef production for this year was estimated at 27.54 billion lbs., in the latest WASDE. That would be 388 million lbs. more (+1.43%) than last year.

Along with expected continued strong domestic beef demand, the latest U.S. beef export data suggests rebounding international markets.

Although U.S. beef exports were 5% lower last year, in volume (1.25 million metric tons—mt) and value ($7.65 billion), they finished 2020 with a near record December, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

December beef exports totaled 119,892 mt, up 8% from December 2019 and the largest in nearly 10 years. Export value in December was $744 million, up 9% from a year ago and the second highest total on record.

Foodservice restrictions in many major markets impacted beef exports significantly, but they trended higher late in the year, bolstered by very strong retail and holiday demand.

“Consumers across the world responded to the COVID-19 pandemic by seeking high-quality products they could enjoy at home, and U.S. beef and pork definitely met this need,” Says Dan Halstrom, USMEF president and CEO. “We expect these retail and home-delivery demand trends to continue even as sit-down restaurant dining recovers, creating robust opportunities for U.S. red meat export growth.”

“The weekly beef export muscle cut data for the first five weeks of 2021 are on par with the strong start in 2020, which bodes well for exporting beef and thus price support. However, the domestic beef market is the primary driver of the industry,” Griffith says.

Friday to Friday Change

Weekly Auction Receipts

Feb. 15 Auction Direct

Video/net

Total
 

130,500

(-94,600)

41,100

(+6,900)

36,700

(+25,800)

208,300

(-61,900)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 11 Change
  $135.34 –  $0.31

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 15 Change
600-700 lbs. $151.50 +  $0.46
700-800 lbs. $140.64 –   $0.50
800-900 lbs. $134.59 +  $0.965

South Central

Steers-Cash Feb. 15 Change
500-600 lbs. $155.23 –   $4.37
600-700 lbs. $140.98 –   $3.69
700-800 lbs. $134.01 –   $1.17

Southeast

Steers-Cash Feb. 15 Change
400-500 lbs. $154.99 –   $5,42
500-600 lbs. $141.66 –   $3.05
600-700 lbs. $132.20 + $0.07

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 12 ($/cwt) Change
Choice $232.37 –  $2.21
Select $220.93 + $0.14
Ch-Se Spread $11.44 –  $2.35

 

Futures

Feeder Cattle  Feb. 12 Change
Mar $140.850 + $2.575
Apr $144.725 + $2.525
May $146.300 + $1.525
Aug $153.600 + $1.250
Sep $154.675 + $1.200
Oct  $155.125 + $0.925
Nov $155.275 + $0.175
Jan ’22 $152.700 + $0.175

 

Live Cattle   Feb. 12 Change
Feb $117.200 + $0.475
Apr $125.175 + $1.400
Jun $121.300 + $1.325
Aug $119.675 + $1.175
Oct $121.925 + $0.775
Dec $124.100 + $0.550
Feb ’22 $125.575 + $0.475
Apr $126.450 + $0.450
Jun $121.550 + $0.450

 

Corn  Feb. 12 Change
Mar ’21 $5.386 –  $0.098
May $5.364 –  $0.110
Jly $5.250 –  $0.112
Sep $4.772 –  $0.060
Oct $4.486 –  $0.030
Mar ’22 $4.554 –  $0.032

 

Oil CME-WTI Feb. 12 Change
Mar $59.47 + $2.62
Apr $59.38 + $2.68
May $59.06 + $2.66
Jun $58.60 + $2.59
Jly $58.05 + $2.49
Aug $57.46 + $2.39

 

Equities

Equity Indexes Feb. 12 Change
Dow Industrial Average  31458.40 +     310.16
NASDAQ  14095.47 +     239.17
S&P 500    3934.83 +      48.00
Dollar (DXY)         91.45 –          0.55
2021-02-19T17:56:09-06:00

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