Although winter weather continued to soften feedlot demand in some areas, calf and feeder cattle prices gained some spark after the middle of the week.
Overall, analysts with the Agricultural Marketing Service (AMS) quoted prices steady to $5 lower early in the week and then steady to $5 higher.
“Those early-week sales all had a downward trend that was spillover from the previous week, followed by lower futures on Tuesday,” AMS analysts say. “Buyer interest waned early in the week due to the winter weather that came in over the weekend. Between mud, snow, ice, or a mixture of all the above, transporting cattle proved to be difficult and sales either cancelled or continued on with lighter receipts.”
Week to week on Friday, Feeder Cattle futures closed an average of $1.86 higher in the front two contracts, an average of 5¢ lower in the back two contracts, and an average of 19¢ higher in between.
Besides the weather and wobbly futures market, Andrew P. Griffith, agricultural economist at the University of Tennessee explains auction receipts may be diluted by the lack of price bounce that typically occurs in January.
“Many producers have become accustomed to holding calves through December and marketing them in January. This has become a common practice for some due to tax reasons and more so for others to capitalize on a price increase that has occurred nine out of the last 10 years (2008-2017 data) from December to January,” Griffith says, in his weekly market comments. “The expectation would be for calf values to begin increasing slowly over the next couple of months and peak once spring grass is ready to graze. However, calf grazing operations may be hesitant to bid up grass cattle prices with the soft feeder cattle prices that are a drag on the market.”
Although there wasn’t a monthly Cattle on Feed report issued Friday, due to the government shutdown, several analysts estimated December placements and the Jan. 1 cattle on feed inventory about 2% higher year over year. Most projected December marketings a little on either side of even.
Speaking of the which, the White House and Congress announced Friday a resolution to reopen the government, at least until Feb. 15, the new deadline for all involved to reach agreement on a budget and border security. While welcome, a cloud of uncertainty remains over which missing market data and reports, if any, USDA will release. For that matter, there’s no telling which February reports will be prioritized, given the possibility of the government shutting down again at the middle of the month.
Fed Cattle Prices Soften
Negotiated cash fed cattle sales sold steady in the beef on Friday at $197/cwt. Live sales were steady to mostly $1 lower at $123 in Kansas and Nebraska and at $123.00 to $125.50 in the western Corn Belt. The Texas Cattle Feeders Association reported its members selling steers at $123, which was $1 less than the previous week.
Week to week on Friday, Live Cattle futures closed an average of 26¢ lower.
Although the deep winter conditions are taking a toll on cattle performance, Griffith points out, “The same conditions could be one factor contributing to strong finished cattle prices as slaughter weights are sure to be declining.”
Wholesale beef values also continue to be supportive.
Week to week on Friday, Choice boxed beef cutout value was $3.86 higher at $217.01/cwt. Select was $2.58 higher at $212.03.
“Wholesale beef markets are starting 2019 with a continuation of generally strong prices seen last year,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his recent market comments. “For the first three weeks of the year, boxed beef cutout prices are up 2.9% for Choice and 3.4% for Select compared to the same period last year.”
“In 2018, weekly boxed beef prices averaged 2.2% higher year over year compared to 2017,” Peel explains. “Wholesale beef prices were higher in 2018 despite a projected 2.8% increase in beef production and larger pork and poultry supplies.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts* Jan. 25 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
186,800 (-80,900) |
35,800 (-27,800) |
32,100 (-28,300) |
254,400 (-80,400) |
CME Feeder Index
| CME Feeder Index* | Jan. 24 | Change |
| $143.21 | + $1.16 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Jan. 25 | Change |
| 600-700 lbs. | $157.70 | + 0.29 |
| 700-800 lbs. | $146.97 | + 0.14 |
| 800-900 lbs. | $141.42 | – 0.29 |
South Central
| Steers-Cash | Jan. 25 | Change |
| 500-600 lbs. | $161.79 | + 3.67 |
| 600-700 lbs. | $146.58 | + 2.19 |
| 700-800 lbs. | $140.82 | + 3.11 |
Southeast
| Steers-Cash | Jan. 25 | Change |
| 400-500 lbs. | $152.88 | + 0.18 |
| 500-600 lbs. | $145.34 | + 1.51 |
| 600-700 lbs. | $135.60 | + 0.03 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Jan. 25 ($/cwt) | Change |
| Choice | $217.01 | + $3.86 |
| Select | $212.03 | + $2.58 |
| Ch-Se Spread | $4.98 | + $1.28 |
Futures
| Feeder Cattle | Jan. 25 | Change |
| Jan ’19 | $143.375 | + $1.925 |
| Mar | $144.625 | + $1.800 |
| Apr | $144.725 | + $0.325 |
| May | $145.075 | + $0.025 |
| Aug | $149.375 | + $0.075 |
| Sep | $149.825 | + $0.325 |
| Oct | $149.600 | – $0.075 |
| Nov | $149.225 | – $0.025 |
| Live Cattle | Jan. 25 | Change |
| Feb ’19 | $126.050 | – $0.475 |
| Apr | $126.850 | – $0.525 |
| Jun | $116.700 | – $0.750 |
| Aug | $113.500 | – $0.100 |
| Oct | $115.075 | – $0.025 |
| Dec | $117.275 | – $0.250 |
| Feb ’20 | $118.650 | – $0.025 |
| Apr | $118.700 | – $0.050 |
| Jun | $111.800 | – $0.150 |
| Corn futures | Jan. 25 | Change |
| Mar ’19 | $3.802 | – $0.014 |
| May | $3.886 | – $0.014 |
| Jul | $3.964 | – $0.008 |
| Sep | $3.990 | – $0.006 |
| Dec | $4.032 | – $0.004 |
| Mar ’20 | $4.120 | – $0.006 |
| Oil CME-WTI | Jan. 25 | Change |
| Mar | $53.69 | – $0.35 |
| Apr | $53.98 | – $0.32 |
| May | $54.31 | – $0.33 |
| Jun | $54.66 | – $0.33 |
| Jul | $54.96 | – $0.31 |
| Aug | $55.16 | – $0.29 |
Equities
| Equity Indexes | Jan. 25 | Change |
| Dow Industrial Average | 24737.20 | + 30.85 |
| NASDAQ | 7164.86 | + 7.63 |
| S&P 500 | 2664.76 | – 5.95 |
| Dollar (DXY) | 95.81 | – 0.55 |