Softer futures prices and volatility in grain markets helped cap recent strength in cash feeder cattle prices. Nationwide, steers and heifers sold $3/cwt. lower to $3 higher, according to USDA’s Agricultural Marketing Service (AMS).
“The pull on yearling cattle is dominated by feedlots that are attempting to fill pen space. Similarly, stocker operators who are taking advantage of the seasonally strong summer feeder cattle market are purchasing calves to replace the yearling cattle that are being moved to the feedlot,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
“Receipts were somewhat curtailed as summer returned to the heart of the country. Dangerous heat indexes spread from the Southwest to the Northeast and everywhere in between mid to late week,” say AMS analysts. “Some rains moved through the Northern Plains with some ranchers in South Dakota still trying to get their first cutting of hay done. Farmers and ranchers have been very focused on moisture needed after last year’s momentous drought that encompassed a vast area of grazing acres. Even though this spring has been extremely wet in places, some areas do need a drink now as heat indexes rise into triple digits.”
Feeder Cattle futures closed an average of $2.26 lower week to week on Friday. That was with Corn futures closing an average of 21¢ lower through the front five contracts week to week.
“With the strength in the yearling market the past couple of weeks, the question on many producers’ minds is how long will these prices hold and if there is a chance they can go higher,” Griffith says. “Starting with history, yearling cattle prices generally display strength from July through the middle of September. The July market started well, but there are some reasons to be concerned that feeder cattle prices will come under pressure sooner rather than later. The expectation of higher corn prices this fall and winter will temper interest in bidding up feeder cattle. Similarly, the sluggish live cattle futures price will weigh on feeder cattle prices moving through the second half of summer and into the fall marketing time period.
“With that being said, it is difficult to imagine yearling cattle prices finding much of a way to climb higher in 2019. At the same time, it may be wise to market yearling cattle sooner rather than later.”
Negotiated cash fed cattle trade ended up mainly steady to $1 lower last week at $111/cwt. in the Southern Plains, $113.00-$113.50 in Nebraska and $114-$116 in the western Corn Belt. Dressed trade was steady at $182-$185.
Live Cattle futures an average of $1.14 lower week to week on Friday.
Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.
Choice boxed beef cutout value was 62¢ higher week to week on Friday afternoon at $213.42/cwt. Select was 9¢ lower at $189.51.
“The $20/cwt. decline since the end of April is not at all surprising when considering last year’s summer low was $28 lower than the spring price peak; the five-year average decline is $30,” Griffith says. “Despite the summer price pressure, the only beef primal exhibiting lower prices compared to last year is the loin. The rib primal struggled through most of May and June, but held its own to start July. The chuck could be considered the primal displaying the most strength as prices are above year-ago levels and trading steady with the winter months. However, the brisket has been king for most of the year as the smoking of briskets has become a craze in more parts of the U.S. than just Texas. Another beef item price to make note of is fresh 50% lean beef. Fresh 50% lean beef comes from the trimmings of finished cattle, and the price of this product has been over $80 since March.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts July 19 |
Auction (head) (change) |
Direct (head) (change) |
Video-Net (head) (change) |
Total (head) (change) |
|
149,400 (+13,700) |
59,200 (-18,500) |
217,200 (+5,400) |
425,800 (+90,300) |
CME Feeder Index
| CME Feeder Index* | July 18 | Change |
| $138.67 | – 2.39 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | July 19 | Change |
| 600-700 lbs. | $160.89 | – $4.06 |
| 700-800 lbs. | $151.00 | – $4.06 |
| 800-900 lbs. | $144.16 | – $4.06 |
South Central
| Steers-Cash | July 19 | Change |
| 500-600 lbs. | $155.07 | + $0.66 |
| 600-700 lbs. | $148.11 | + $0.29 |
| 700-800 lbs. | $141.21 | – $0.89 |
Southeast
| Steers-Cash | July 19 | Change |
| 400-500 lbs. | $147.78 | + $0.10 |
| 500-600 lbs. | $141.63 | + $0.58 |
| 600-700 lbs. | $132.33 | – $2.43 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | July 19 ($/cwt) | Change |
| Choice | $213.42 | + $0.62 |
| Select | $189.51 | – $0.09 |
| Ch-Se Spread | $23.91 | + $0.71 |
Futures
| Feeder Cattle | July 19 | Change |
| Aug | $139.375 | – $2.225 |
| Sep | $139.800 | – $2.750 |
| Oct | $140.025 | – $2.825 |
| Nov | $140.225 | – $2.400 |
| Jan ’20 | $138.900 | – $2.125 |
| Mar | $137.900 | – $1.975 |
| Apr | $138.250 | – $1.925 |
| May | $138.375 | – $1.875 |
| Live Cattle | July 19 | Change |
| Aug | $107.600 | – $0.875 |
| Oct | $108.500 | – $1.475 |
| Dec | $113.175 | – $1.050 |
| Feb ’20 | $117.025 | – $1.125 |
| Apr | $118.775 | – $1.350 |
| Jun | $112.100 | – $1.200 |
| Aug | $110.450 | – $1.100 |
| Oct | $112.300 | – $1.075 |
| Dec | $113.800 | – $1.050 |
| Corn futures | July 19 | Change |
| Jul | $4.306 | – $0.236 |
| Sep | $4.356 | – $0.236 |
| Dec | $4.440 | – $0.210 |
| Mar ’20 | $4.480 | – $0.186 |
| May | $4.512 | – $0.164 |
| Jul | $4.254 | – $0.060 |
| Oil CME-WTI | July 19 | Change |
| Aug | $55.63 | – $4.58 |
| Sep | $55.76 | – $4.54 |
| Oct | $55.82 | – $4.45 |
| Nov | $55.86 | – $4.29 |
| Dec | $55.83 | – $4.13 |
| Jan ’20 | $55.72 | – $3.98 |
Equities
| Equity Indexes | July 19 | Change |
| Dow Industrial Average | 27154.20 | – 177.83 |
| NASDAQ | 8146.49 | – 97.65 |
| S&P 500 | 2976.61 | – 37.16 |
| Dollar (DXY) | 97.07 | + 0.35 |