Calf and feeder cattle prices started the week softer with continued pressure from Cattle futures and extreme winter weather. When futures rebounded, cash prices followed suit.
Feeder steers and heifers sold steady to $8/cwt. lower early in the week and then $2-$8 higher after the mid-week bounce in futures prices, according to the Agricultural Marketing Service (AMS).
Likewise, steer and heifer calves sold steady to $6 lower early in the week and then steady to $8 higher.
“In the North Plains, heavier-fleshed backgrounded cattle are plentiful, however grass cattle and high-quality replacement heifers are in high demand currently with not enough to go around for the buyers,” AMS analysts say.
Feeder Cattle futures closed an average $2.80 higher week to week on Friday.
“At this time, there is no reason to expect an increase or decrease in calf and feeder cattle prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “One piece of information to keep an eye on is the Drought Monitor. Nearly 61% of the country is experiencing abnormal dryness to extreme drought, which is 18 percentage points higher than the end of November.”
Griffith explains drought areas include the Great Plains and much of the Southeast, with the driest areas in the panhandles of Texas and Oklahoma.
“These drought conditions will continue to weigh on wheat grazing country, which is not supportive of calf prices. However, the poor grazing conditions in this area have been persistent through much of the late fall and early winter months and are largely priced into today’s market,” Griffith says. “The market may have to make it through the first quarter of 2018 before significant price improvement occurs. However, producers should not be expecting a repeat of 2017 where prices strengthened from January through June and then held steady for much of the second half of the year. The market continues to slowly seek the historical seasonal price trend and decision makers should consider this.”
Fed Cattle Prices Looked Higher
“Anecdotes of Northern Plains feedyards shipping cattle to the Southern Plains to complete kills for the week were abuzz around the industry with feedyards willing to wait and see if prices got better later in the week,” say AMS analysts.
There were too few cash fed cattle trades to trend through Friday afternoon. According to the AMS Cattle Dashboard, 1,036 head were reported on Friday with steers selling for $121.31/cwt. on a live basis and at $193 in the beef.
Similarly, the Texas Cattle Feeders Association reported its members trading steers about $2 higher than the previous week at $122.04 and heifers about $3 higher at $123.
The previous week, live trade was at $120/cwt. in all major cattle feeding regions. Dressed trade was at $192 in Nebraska and the western Corn Belt.
Live Cattle futures closed an average of $2.65 higher week to week on Friday ($1.60 higher to $4.52 in spot Feb).
“Given the futures close for the week, cattle feeders hold a little leverage over packers in the short term…Cattle feeders’ leverage should last as long as the futures price holds,” Griffith says.
Choice boxed beef cutout value was $3.37 lower week to week on Friday at $204.86; Select was $1.48 lower at $200.16.
According to AMS, dressed steer slaughter weights were reported at 900 lbs. for the week ending Jan. 6, which is 5 lbs. below last year and 10 lbs. below the previous 5-year average.
A wildcard heading into this week will be the absence of data provided by the Agricultural Marketing Service, if the government shutdown continues.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Jan. 19 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
225,000 (-147,300) |
51,100 (+11,300) |
2,400 (-115,800) |
278,500 (-251,800) |
CME Feeder Index
| CME Feeder Index | Jan. 18 | Change |
| $148.01 | + 2.17 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Jan. 19 | Change |
| 600-700 lbs. | $164.99 | – $0.10 |
| 700-800 lbs. | $152.76 | – $6.83 |
| 800-900 lbs. | $145.15 | – $0.47 |
South Central
| Steers-Cash | Jan. 19 | Change |
| 500-600 lbs. | $168.31 | + $2.40 |
| 600-700 lbs. | $157.65 | + $4.48 |
| 700-800 lbs. | $148.23 | + $3.36 |
| 800-900 lbs. | $143.24 | + $3.71 |
Southeast
| Steers-Cash | Jan. 19 | Change |
| 400-500 lbs. | $160.47 | – $5.06 |
| 500-600 lbs. | $152.07 | – $3.97 |
| 600-700 lbs. | $145.32 | + $0.05 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Jan. 19 ($/cwt) | Change |
| Choice | $204.86 | – $3.37 |
| Select | $200.16 | – $1.48 |
| Ch-Se Spread | $4.70 | – $1.89 |
Futures
| Feeder Cattle | Jan. 19 | Change |
| Jan | $147.950 | + $3.600 |
| Mar | $145.600 | + $2.950 |
| Apr | $146.075 | + $3.075 |
| May | $145.800 | + $3.100 |
| Aug | $148.175 | + $2.425 |
| Sep | $148.000 | + $2.275 |
| Oct | $147.575 | + $2.300 |
| Nov | $147.625 | + $2.700 |
| Live Cattle | Dec. Jan. 19 | Change |
| Feb | $121.900 | + $4.525 |
| Apr | $122.275 | + $2.825 |
| Jun | $114.725 | + $2.650 |
| Aug | $112.025 | + $2.975 |
| Oct | $112.975 | + $2.600 |
| Dec | $114.950 | + $2.575 |
| Feb ’19 | $115.925 | + $2.200 |
| Apr | $115.650 | + $1.900 |
| Jun | $108.775 | + $1.600 |
| Corn futures | Jan. 19 | Change |
| Mar | $3.524 | + $0.062 |
| May | $3.606 | + $0.060 |
| Jul | $3.690 | + $0.064 |
| Sep | $3.764 | + $0.058 |
| Dec | $3.856 | + $0.052 |
| Mar ’19 | $3.946 | + $0.050 |
| Oil CME-WTI | Jan. 19 | Change |
| Feb | $63.37 | – $0.93 |
| Mar | $63.31 | – $0.92 |
| Apr | $63.16 | – $0.87 |
| May | $62.96 | – $0.81 |
| Jun | $62.68 | – $0.76 |
| Jul | $62.33 | – $0.72 |
Equities
| Equity Indexes | Jan. 19 | Change |
| Dow Industrial Average | 26071.72 | + 268.53 |
| NASDAQ | 7336.38 | + 75.32 |
| S&P 500 | 2810.30 | + 24.06 |
| Dollar (DXY) | 90.69 | – 0.28 |