Cash feeder cattle continued to make incremental gains last week, supported by stability in the futures market and what looked to be steady to higher fed cattle prices. The previous week’s neutral Cattle on Feed report and the Cattle inventory report—hinting at an end to cyclically growing cattle numbers—also helped.
Overall, steers and heifers sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS), with some auctions in the Northern Plains reporting prices $4-$8 higher.
Feeder Cattle futures closed an average of $3.06 higher week to week on Friday ($2.12 higher at the back to $4.30 higher toward the front).
“It is always difficult to project what the market is going to do, but the best guess on yearling cattle is for the market to remain steady or gain a few dollars over the next four to five weeks,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The one thing that could stop a feeder cattle price rally in the next couple of weeks is a bullish crop report that sends corn prices closer to $5.” The next USDA reports with estimated crop production for this year are due out Aug. 12.
Corn futures closed an average of 11¢ lower through the front five contracts week to week on Friday. That’s 32¢ lower for those contracts in the last two weeks.
“Weaned and vaccinated cattle will continue to be in strong demand moving through the fall marketing time period as winter stocker programs look for inventory to put on pasture. The strong demand for those cattle today is associated with favorable forage conditions, good moisture, and the desire to receive lower risk cattle…” Griffith says.
AMS analysts point out, the U.S. Drought Monitor last week indicated drought across about 11% of the nation; about 3% in Moderate drought. “This is in a drastic contrast to a year ago, when near 54% of the country showed in drought status and 32% in Moderate drought or worse,” they say.
For the week ending July 21, 66% of the nation’s pasture and range was rated in Good (53%) or Excellent (13%) condition, compared to 45% last year. 9% was rated as Poor (7%) or Very Poor (2%), compared to 26% a year earlier.
Fed Cattle Prices Looked Steady to Higher
Negotiated cash fed cattle traded at $112/cwt. in the Texas Panhandle on Friday, according to the Texas Cattle Feeders Association. That was $1 more than a week earlier.
Elsewhere, prices were yet to be established through late Friday afternoon, according to reports from the Agricultural Marketing Service. Although too few to trend, there were some early live sales reported in the Western Corn Belt at $115-$116 and a few in the beef at $185. Those prices are at the top of the range for the region the prior week.
Live Cattle futures an average of $1.01 higher week to week on Friday.
Feedlot marketing remains current, based on the most recent USDA slaughter and carcass grading data.
The average dressed steer weight for the week ending July 13 was 865 lbs., which was 4 lbs. more than the previous week but 2 lbs. lighter year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 791 lbs. was 1 lb. lighter than the previous week and 8 lbs. less year over year. Fed cattle slaughter of 531,743 head for the week was 11,828 head more than the same week a year earlier. Total cattle slaughter of 658,432 was 8,134 head more.
Moreover, Griffith says recent declines in frozen beef inventories point to strong demand.
“The quantity of beef in cold storage at the end of June totaled 394.5 million lbs., which only represents 78% of the average weekly beef production in 2019,” Griffith explains. “Thus, less than a week’s worth of beef production is in a freezer, which is an indicator that beef is moving at a decent pace. The June value is the lowest quantity of beef in cold storage since October 2014, which corresponds to a time period when fewer animals were being harvested due to rapid expansion in the beef cattle herd.”
Although seasonally softer, wholesale beef values continue higher than last year.
Choice boxed beef cutout value was $1.25 lower week to week on Friday afternoon at $212.17/cwt. Select was $1.17 lower at $188.34.
“Boxed beef values have pretty much held their ground during the dog days of summer as excellent beef demand, continued large kill levels and good margins remain for packers,” say AMS analysts.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts July 26 |
Auction (head) (change) |
Direct (head) (change) |
Video-Net (head) (change) |
Total (head) (change) |
|
131,200 (-18,200) |
62,500 (+3,300) |
113,800 (-103,400) |
307,500 (-118,300) |
CME Feeder Index
| CME Feeder Index* | July 25 | Change |
| $139.58 | + 0.93 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | July 26 | Change |
| 600-700 lbs. | $165.47 | + $4.58 |
| 700-800 lbs. | $154.35 | + $3.45 |
| 800-900 lbs. | $148.73 | + $4.57 |
South Central
| Steers-Cash | July 26 | Change |
| 500-600 lbs. | $156.51 | + $1.44 |
| 600-700 lbs. | $150.18 | + $2.07 |
| 700-800 lbs. | $141.81 | + $0.60 |
Southeast
| Steers-Cash | July 26 | Change |
| 400-500 lbs. | $148.28 | + $0.50 |
| 500-600 lbs. | $143.00 | + $1.37 |
| 600-700 lbs. | $137.06 | + $4.73 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | July 26 ($/cwt) | Change |
| Choice | $212.17 | – $1.25 |
| Select | $188.34 | – $1.17 |
| Ch-Se Spread | $23.83 | – $0.08 |
Futures
| Feeder Cattle | July 26 | Change |
| Aug | $143.725 | + $3.750 |
| Sep | $144.100 | + $4.300 |
| Oct | $143.575 | + $3.550 |
| Nov | $143.300 | + $3.075 |
| Jan ’20 | $141.600 | + $2.700 |
| Mar | $140.375 | + $2.475 |
| Apr | $140.800 | + $2.550 |
| May | $140.500 | + $2.125 |
| Live Cattle | July 26 | Change |
| Aug | $108.650 | +$1.050 |
| Oct | $109.900 | +$1.400 |
| Dec | $114.300 | +$1.125 |
| Feb ’20 | $118.025 | +$1.000 |
| Apr | $119.775 | +$1.000 |
| Jun | $113.050 | +$0.950 |
| Aug | $111.100 | +$0.650 |
| Oct | $113.000 | +$0.700 |
| Dec | $115.000 | +$1.200 |
| Corn futures | July 26 | Change |
| Jul | $4.144 | – $0.162 |
| Sep | $4.244 | – $0.112 |
| Dec | $4.344 | – $0.096 |
| Mar ’20 | $4.386 | – $0.094 |
| May | $4.422 | – $0.090 |
| Jul | $4.210 | – $0.044 |
| Oil CME-WTI | July 26 | Change |
| Sep | $56.20 | +$0.44 |
| Oct | $56.33 | +$0.51 |
| Nov | $56.42 | +$0.56 |
| Dec | $56.43 | +$0.60 |
| Jan ’20 | $56.36 | +$0.64 |
| Feb | $56.21 | +$0.65 |
Equities
| Equity Indexes | July 26 | Change |
| Dow Industrial Average | 27192.45 | + 38.25 |
| NASDAQ | 8330.21 | +183.72 |
| S&P 500 | 3025.86 | + 49.25 |
| Dollar (DXY) | 97.91 | + 0.84 |