Cattle Current Weekly Highlights-Week ending Jan. 18, 2019

Cattle Current Weekly Highlights-Week ending Jan. 18, 2019

Winter weather and muddy feedlot pens continued to hamper calf and feeder cattle demand last week, with steers and heifers selling $2-$6/cwt. lower, according to the Agricultural Marketing Service (AMS).  

“The larger drop in the market occurred in the regions affected by Winter Storm Gia the previous weekend and the forecasted Winter Storm Harper last weekend,” explained AMS analysts. “A vast area of the Plains states are dealing with excess moisture this time of year with more on the way.”

Week to week on Friday, Feeder Cattle futures closed an average of $2.27 lower across the front half of the board ($1.00 lower to $4.67 lower in spot Jan) and then an average of 40¢ lower.

“Feedlots are in no humor to purchase cattle and transport them through wet and icy road conditions to then run the calves off the truck into muddy pens,” says  Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “At the same time, cattle feeders are in no humor to pay big dollars for feeder cattle that will be placed against the June and August Live Cattle futures that are at a $10 and $14 discount to April, respectively.”

Locally, Griffith pointed out the aforementioned summer discount had pressured load lot prices for heavy yearlings about $5/cwt. lower in January, compared to the previous month, as much as $15 lower compared to November.

“The bright spot is that the price of a 900 lb. steer is the same as the price of an 800 lb. steer, which provides incentive to keep feeding cattle and growing them larger,” Griffith says. “The price signal on heavy feeder cattle is the market signal feedlot managers are sending to producers. At this time, the best decision may be to keep feeding 700 and 800 lb. feeder cattle and keep an eye on the cash market.”

Fed Cattle Prices Appeared Steady to Higher

Although cattle feeders with muddy lots were looking to move cattle, and presumably, packers had a need to refurbish inventory, fed cattle trade remained at an impasse through Friday afternoon, based on USDA reports. However, indications suggested prices no worse than steady, perhaps a touch higher.

Week to week on Friday, Live Cattle futures closed 25¢ to $1.55 higher in the front three contracts and then an average of 57¢ lower.

“Since the middle of November, the February live cattle contract price has increased by $9, which amounts to approximately $120 per head value increase,” Griffith explains. “On the cash side of the business, prices increased $10/cwt. from the middle of November to the previous week and this last week’s prices appeared geared to gain another couple of dollars. Over this time period, cattle feeding margins and packer margins have been flipped as cattle feeders appear to be in control of the leverage.”

Leverage should have been supported last week by firmer wholesale beef prices. Week to week on Friday, Choice boxed beef cutout value was 69¢ higher at $213.15/cwt. Select was $3.18 higher at $209.45. The Choice-Select spread was the narrowest since September of 2017 at $3.70.

Friday to Friday Change*

Weekly Auction Receipts

Receipts*

Jan. 18

Auction (head)

(Change)

Direct (head)

(Change)

Video/net (head)

(Change)

Total (head)

(Change)

 

267,700

(-99,200)

63,600

(-1,400)

3,800

(-150,600)

335,100

(-251,200)

*Compared to two weeks earlier

CME Feeder Index

CME Feeder Index* Jan. 17 Change
  $142.05   –  $3.41

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central*

Steers-Cash Jan. 18  Change 
600-700 lbs. $157.41 –    3.29
700-800 lbs. $146.83 –    3.17
800-900 lbs. $141.71 –    1.90

 

South Central*

Steers-Cash Jan. 18 Change
500-600 lbs. $158.12 –    4.68
600-700 lbs. $144.39 –    $4.93
700-800 lbs. $137.71 –    $6.02

 

Southeast*

Steers-Cash Jan. 18 Change 
400-500 lbs. $152.70 –    $5.64
500-600 lbs. $143.83 –    $4.68
600-700 lbs. $135.57 –    $4.41

*Compared to two weeks earlier

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 18 ($/cwt) Change
Choice $213.15 +  $0.69
Select $209.45 +  $3.18  
Ch-Se Spread $3.70 –   $2.49

 

Futures

Feeder Cattle  Jan. 18 Change
Jan ’19 $141.450 –    $4.675
Mar $142.825 –    $2.075
Apr $144.400 –    $1.350
May $145.050 –    $1.000
Aug $149.300 –    $0.600
Sep $149.500 –    $0.400
Oct $149.675 –    $0.200
Nov $149.250 –    $0.400

 

Live Cattle   Jan. 18 Change
Feb ’19 $126.525 +   $1.550
Apr $127.375 +   $1.000
Jun $117.450 +   $0.250
Aug $113.600 –   $0.675
Oct $115.100 –   $1.025
Dec $117.525 –   $0.725
Feb ’20 $118.675 –   $0.575
Apr $118.750 –   $0.250
Jun $111.950 –   $0.150

 

Corn futures Jan. 18 Change
Mar ’19 $3.816 + $0.034
May $3.900 + $0.034
Jul $3.972 + $0.030
Sep $3.996 + $0.024
Dec $4.036 + $0.022
Mar ’20 $4.126 + $0.020

 

Oil CME-WTI Jan. 18 Change
Feb $53.80 +   $2.21
Mar $54.04 +   $2.13
Apr $54.30 +   $2.03
May $54.64 +   $1.94
Jun $54.99 +   $1.88
Jul $55.27 +   $1.81

 

Equities

Equity Indexes Jan. 18 Change
Dow Industrial Average  24706.35 +   710.40
NASDAQ     7157.23 +   185.75
S&P 500     2670.71 +      74.45
Dollar (DXY)          96.36 +        0.69
2019-01-19T18:12:19+00:00

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