Despite the soft start for most commodities and outside markets, in reaction to more U.S. tariffs levied on Chinese imports, calf and feeder cattle prices continued mostly higher nationwide. According to the Agricultural marketing Service (AMS), steers and heifers sold $1-$4/cwt. higher, with instances of $6-$7 higher. Receipts for the week of 604,300 head were the most since July of 2010. That includes an estimated 217,000 selling in Superior Livestock Video Auction’s Week in the Rockies sales.
“Active markets were evident this week in spite of hot and humid weather scorching the center of the country, with no end in sight for drought stricken areas,” say AMS analysts. “The water situation in some areas is at critical levels…A consequence of the extra dollars being spent this summer on water and feed is leading to cattle being sold at auction more than in a normal year when receipts get light in the summer.”
Week to week on Friday, Feeder Cattle futures closed an average of $1.12 lower through the front half of the board and then narrowly mixed from 20¢ lower to 15¢ higher.
“The market has shown considerable strength from late spring through the early weeks of summer,” saysAndrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The question now is if prices will continue to strengthen or if there is any reason for prices to be pressured. Feeder cattle prices certainly have enough juice in the tank to gain $3-$5/cwt. more from mid-July through the middle of August. Alternatively, there is enough political unrest across the nation and the world to disrupt such gains, which then could lead to a softer market. If the current political rhetoric persists, then very little change is expected, but an escalation of said rhetoric could be a market mover.”
By and large, negotiated cash fed cattle trade remained undeveloped through late Friday afternoon, at least in terms of trends from USDA. The Texas Cattle Feeders Association reported its members in the Southern Plains trading cattle at $111/cwt., which was $2 less than the previous week.
“It is difficult to say if the summer price low for fed cattle has already been established at just below $107/cwt., but the risk of going much lower than that is extremely low,” says Griffith. “The best odds are for finished cattle to trade fairly flat the next several weeks, though the term flat may actually look more like a saw blade. Some of the price pressure on live cattle should be alleviated moving into fall.”
Week to week on Friday, Live Cattle futures closed an average of $2.12 lower through the front three contracts and then an average of 82¢ lower.
The monthly World Agricultural Supply and Demand Estimates (WASDE) released during the week projects, third-quarter steer prices (5-area Direct) at $107-$111. For the fourth quarter, prices are forecast at $108-$116.
Wholesale beef values continued to coast seasonally lower.
Choice boxed beef cutout value was $3.89 lower week to week on Friday at $204.14/cwt. Select was $2.34 lower at $196.37. The Choice-Select spread narrowed $1.55 to $7.77.
“This time of year, domestic consumers are beginning to shy away from grilling middle meats, strictly due to increasing temperatures,” Griffith says. “At the same time, many consumers move towards hamburgers and hotdogs for grilling purposes.”
International demand for U.S. beef continues on a record-setting pace, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). May beef exports set a new monthly value record in at $722.1 million, which was 24% more than a year earlier and 4% more than the previous record. Volume for the month of 117,871 metric tons was the sixth most on record.
Beef export value averaged $313.39 per head of fed slaughter in May, up 18% from a year ago. The January-May average was $317.69 per head, also up 18%.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts July 13 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
170,100 (+153,100) |
109,700 (+75,400) |
324,500 (+295,500) |
604,300 (+524,000) |
CME Feeder Index
| CME Feeder Index | July 12 | Change |
| $148.16 | + 3.01 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | July 13 | Change |
| 600-700 lbs. | $174.72 | – $3.24 |
| 700-800 lbs. | $163.94 | + $3.94 |
| 800-900 lbs. | $155.30 | + $11.80 |
South Central
| Steers-Cash | July 13 | Change |
| 500-600 lbs. | $161.76 | – $2.39 |
| 600-700 lbs. | $157.77 | + $0.11 |
| 700-800 lbs. | $149.29 | + $0.86 |
Southeast
| Steers-Cash | July 13 | Change |
| 400-500 lbs. | $158.02 | + $8.40 |
| 500-600 lbs. | $152.30 | – $2.24 |
| 600-700 lbs. | $143.06 | – $4.41 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | July 13 ($/cwt) | Change |
| Choice | $204.14 | – $3.89 |
| Select | $196.37 | – $2.34 |
| Ch-Se Spread | $7.77 | – $1.55 |
Futures
| Feeder Cattle | July 13 | Change |
| Aug | $150.725 | – $1.475 |
| Sep | $151.075 | – $1.200 |
| Oct | $151.350 | – $0.800 |
| Nov | $151.025 | – $1.000 |
| Jan ’19 | $149.525 | + $0.150 |
| Mar | $148.225 | + $0.125 |
| Apr | $148.350 | – $0.200 |
| May | $148.250 | + $0.150 |
| Live Cattle | July 13 | Change |
| Aug | $104.550 | – $1.825 |
| Oct | $107.375 | – $2.225 |
| Dec | $111.400 | – $2.300 |
| Feb ’19 | $115.750 | – $0.775 |
| Apr | $117.425 | – $0.825 |
| Jun | $110.200 | – $0.950 |
| Aug | $109.300 | – $0.700 |
| Oct | $110.850 | – $0.750 |
| Dec | $112.175 | – $0.925 |
| Corn futures | July 13 | Change |
| Jul | $3.302 | – $0.214 |
| Sep | $3.412 | – $0.190 |
| Dec | $3.546 | – $0.184 |
| Mar ’19 | $3.664 | – $0.168 |
| May | $3.732 | – $0.168 |
| Jul | $3.792 | – $0.172 |
| Oil CME-WTI | July 13 | Change |
| Aug | $71.01 | – $2.79 |
| Sep | $69.95 | – $1.62 |
| Oct | $68.55 | – $0.59 |
| Nov | $68.01 | – $0.49 |
| Dec | $67.58 | – $0.46 |
| Jan | $67.15 | – $0.47 |
Equities
| Equity Indexes | July 12 | Change |
| Dow Industrial Average | 25019.41 | + 562.93 |
| NASDAQ | 7825.98 | + 137.59 |
| S&P 500 | 2801.31 | + 41.49 |
| Dollar (DXY) | 94.69 | + 0.69 |