Calf and feeder cattle prices wobbled from the new-year gate last week.
“Muddy pen conditions, as temperatures increased in the North and with rain and snow in the South, caused concerns, especially on the placements of heavier-weight cattle,” say analysts with the Agricultural Marketing Service (AMS). They note receipts were hindered by heavy rains across the Southeast, winter storms in the North Central and South Central regions, as well as the fact that some auction remained closed for the holidays.
Compared to two weeks earlier, steers weighing less than 700 lbs. traded mostly $1-$4/cwt. higher, with instances of up to $9 higher in Nebraska, according to AMS. Steers weighing more than 700 lbs. sold steady to $4 lower.
“The feeder cattle market has found itself in a precarious situation due to the holiday marketing disruption, unfavorable weather conditions for moving cattle, and a potential loss of information from the partial government shutdown,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
Feeder Cattle futures closed an average of $2.68 lower week to week on Friday ($1.35 lower to $4.17 lower in spot Jan). Pressure included negative and volatile outside markets along with increasing grain prices.
Cash Fed Cattle Hold Steady
Negotiated cash fed cattle trade for the week was generally steady in Nebraska and the Southern Plains at $123/cwt. ($122.00-$122.50 in Nebraska). Live sales were $1-$2 higher in the western Corn Belt at $121-$122. Dressed trade was steady in Nebraska at $195; steady to $4 higher in the western Corn Belt at $194-$195.
AMS analysts note, “Poor feedlot conditions have continued to plague most feeding regions, lowering cattle performance.”
Week to week on Friday, not counting newly minted away Jun, Live Cattle futures closed an average of $2.02 lower through the front three contracts and then an average of 64¢ lower.
“The finished cattle market finished off 2018 strong and has started 2019 with the same strength,” Griffith says. “The gains in the fed cattle market during December established strong profit margins for cattle on a cash-to-cash basis and likely resulted in many of these cattle profiting $100 per head or better. On the other hand, many feedlot managers likely had cattle hedged, resulting in slightly lower margins in some instances. Regardless of the situation, cattle feeders are enjoying the price escalation for finished cattle and the recouping of dollars lost on previous sets of cattle. The questions to be answered now are how long positive margins will last and how will it influence the feeder cattle market as competition develops.”
Fed cattle prices continue to be supported by firmer boxed beef cutout values than some expected.
Week to week, wholesale beef values were about steady. Choice boxed beef cutout value was at $214.51/cwt. Friday afternoon and Select was at $207.66.
“The volume (boxed beef) reported this week was slightly more than last week,” say AMS analysts. “On the Choice side, rib cuts were steady to weak, while all other cuts sold firm to higher. Ground beef prices were slightly higher on lighter volume. Forward-negotiated sales remain light but mostly steady when compared to the prior week. Beef trimmings were higher on moderate to good demand and light to moderate offerings.”
Friday to Friday Change*
Weekly Auction Receipts
*Compared to two weeks earlier
CME Feeder Index
|CME Feeder Index*||Jan. 3||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$160.35||+ $1.65|
|700-800 lbs.||$149.04||– $2.01|
|800-900 lbs.||$143.29||– $6.32|
|500-600 lbs.||$162.75||+ $1.33|
|600-700 lbs.||$153.57||+ $4.75|
|700-800 lbs.||$146.93||+ $0.91|
|400-500 lbs.||$157.59||+ $5.20|
|500-600 lbs.||$150.59||+ $6.25|
|600-700 lbs.||$139.69||+ $3.54|
*Compared to two weeks earlier
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Jan. 4 ($/cwt)||Change|
|Ch-Se Spread||$6.85||– $0.04|
|Feeder Cattle||Jan. 4||Change|
|Jan ’19||$144.900||– $4.175|
|Live Cattle||Jan. 4||Change|
|Feb ’19||$121.925||– $2.250|
|Feb ’20||$117.650||– $0.600|
|Corn futures||Jan. 4||Change|
|Mar ’19||$3.830||+ $0.076|
|Mar ’20||$4.132||+ $0.066|
|Oil CME-WTI||Jan. 4||Change|
|Equity Indexes||Jan. 4||Change|
|Dow Industrial Average||23433.16||+ 370.89|
|S&P 500||2531.94||+ 46.21|
|Dollar (DXY)||96.20||– 0.18|