Calves and feeder cattle remained lightly tested during another holiday-shortened week.
“Those that did have sales were quoting much stronger prices as order buyers and farmer feeders alike were back in the seats ready to fill orders,” said analysts with the Agricultural Marketing Service (AMS). “Most observers described buyers’ moods as being hungry and ready to procure cattle as the holidays seemed to drag out this year.”
Except for 37¢ higher in the back contract, Feeder Cattle futures closed an average of $1.29 lower week to week on Friday (7¢ lower toward the back to $2.20 lower in spot Jan).
“Calf prices do tend to start strengthening in January, but it generally takes a couple of weeks for prices to start their strong spring ascension,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.“Typically, the price for lightweight cattle continues to increase in February and March, but this is not a recommendation to hold calves until March. This is a recommendation to hold onto the reins a little longer to see if the market is going to move in the favor of those looking to market calves in the near term.”
Fed Cattle Prices Continue Higher
Negotiated cash fed cattle trade developed fully on Friday with live sales $2 higher at $124/cwt. in the Southern Plains and Nebraska; $2-$4 higher in the western Corn Belt at $125. Dressed sales were mostly $4 higher in Nebraska at mainly $199 and $3-$4 higher in the western Corn Belt at $198-$199.
Except for 10¢ lower toward the back, Live Cattle futures closed an average of $1.09 lower (12¢ lower toward the back to $2.10 lower toward the front).
“The market and feeding conditions are both far better than where they were a year ago. Market prices today are only a couple of dollars higher than the same week last year, but cattle coming off feed right now were purchased much cheaper than the cattle coming off this time last year,” Griffith says. “At the same time, most cattle feeders are not dealing with the same wet and sloppy feeding conditions they had last year which resulted in a higher feed cost and lighter cattle coming off feed.”
The average dressed steer weight for the week ending Dec. 21 was 904 lbs., which was the same as a week earlier but 13 lbs. heavier than the prior year, according to USDA’s latest Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 1 lb. lighter than the previous week but 8 lbs. heavier than the previous year.
Choice boxed beef cutout value was 47¢ lower week to week on Friday at $208.49/cwt. Select was 82¢ higher at $205.39.
“Retailers are beginning to pull on Select grade beef as winter rolls in and as consumers move to consumption of end cuts,” Griffith says. “The change is most evident in the narrowing of the Choice-Select spread, which generally provides an indication of relative quantity supplied and demanded for Choice and Select beef.”
As is typical, the Choice-Select spread will likely continue to narrow through February, but Griffith emphasizes Choice demand remains strong and is expected to remain strong.
Friday to Friday Change
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Jan. 2||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$154.66||+ $0.12|
|700-800 lbs.||$147.74||– $1.75|
|800-900 lbs.||$144.74||– $3.95|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Jan. 3 ($/cwt)||Change|
|Ch-Se Spread||$3.10||– $1.29|
|Feeder Cattle||Jan. 3||Change|
|Jan ’20||$143.350||– $2.200|
|Live Cattle||Jan. 3||Change|
|Feb ’20||$124.725||– $1.975|
|Feb ’21||$122.125||– $0.125|
|Mar ’20||$3.864||– $0.036|
|Mar ’21||$4.110||– $0.012|
|Oil CME-WTI||Jan. 3||Change|
|Equity Indexes||Jan. 3||Change|
|Dow Industrial Average||28634.88||– 10.38|
|S&P 500||3234.85||– 5.17|
|Dollar (DXY)||96.90||– 0.11|