Cattle markets moved higher last week, amid promising signs that aggressive marketing and consumer beef demand are muting the impact of increased beef production.
Steers and heifers sold $1-$5 higher, with instances of $6-$8 higher, according to the Agricultural Marketing Service (AMS).
Feeder Cattle futures closed an average of $2.36 higher week to week on Friday (95¢ to $3.70 higher). That’s an average of $4.11 higher over the last two weeks.
“Demand was reported moderate to good nationwide as more optimism was evident in the marketplace,” explained AMS analysts. “The CME Cattle Complex rebounded from the most recent downturn in mid-May. The June Live Cattle contract is trying to converge with the negotiated cash trade. Cash trading
is pulling the futures higher.”
By late Friday afternoon, cash fed cattle trade remained mostly undeveloped. Although too few transactions to trend, higher money was reported in Nebraska at $114/cwt. on a live basis, which was $2.50-$3.00 higher than the previous week. Early live sales in the western Corn Belt were at $114-$115 ($3-$4 higher); early dressed sales were $4-$6 higher at $182. Late in the day, the Texas Cattle Feeders Association reported its members trading live cattle at $115, which was $5 higher than the previous week.
Live Cattle futures closed an average of $1.93 higher week to week on Friday ($1.12 higher to $5.12 higher in spot Jun).
Optimism came this week with continued indicators that cattle feeders remain current in their marketing, even as fed cattle supplies increase. Part of that came with basis opportunities and a willingness to sell more cattle out front in recent weeks.
“Starting the middle of March, after 10 consecutive weeks of 20,000 head or more (marketed) for 15-30-day delivery on fed cattle, the past couple weeks have cooled to 19,000 and 9,900 head, respectively, for cattle bought out front,” explain AMS analysts. “In addition, packer margins have been rather large, with some being reported around $300-plus per head recently, due to boxed beef prices higher than expected, and consumer demand, both domestically and internationally.”
Beef export volume in April was 11% more than a year earlier and export value was 23% higher at $676.7 million, the fourth highest on record, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Through the first four months of 2018, exports were up 10% in volume. Export value was 20% more than last year’s record pace at $2.59 billion. Beef export value averaged $328.46 per head of fed slaughter in April, up 16% from a year ago. Through April, per-head export value averaged $318.91, up 17%.
Choice boxed beef cutout value was $1.32 lower week to week on Friday at $226.21/cwt. Select was $1.62 lower at $203.18.
“Choice Boxed Beef in May did not post a price lower than $226 and averaged $229.70 for the month,” AMS analysts say. “Packers are selling as much product out front as they can at these elevated levels and are content to harvest as many as they can.”
Beef production under federal inspection for the week ending June 9 was estimated at 523.1 million lbs., which was 3.6% more than a year earlier, according to AMS. That was on an estimated 3.5% year-over-year increase in cattle (all) slaughter of 658,000 head. Total red meat production under Federal inspection of 1,010 million lbs. was 4.2% more than a year earlier. Cumulative red meat production for the year to date was estimated 3.7% higher.
According to AMS, total weekly cattle slaughter—for the four weeks prior to Memorial Day—were running more than 53,000 head more per week than the five-year average.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts June 8 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
217,300 (+106,400) |
35,500 (-16,100) |
6,100 (-9,800) |
258,900 (+80,500) |
CME Feeder Index
| CME Feeder Index | June 7 | Change |
| $140.49 | + 4.32 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | June 8 | Change |
| 600-700 lbs. | $166.60 | + $1.11 |
| 700-800 lbs. | $158.65 | + $6.66 |
| 800-900 lbs. | $142.54 | + $3.44 |
South Central
| Steers-Cash | June 8 | Change |
| 500-600 lbs. | $165.93 | + $1.56 |
| 600-700 lbs. | $154.81 | + $1.93 |
| 700-800 lbs. | $143.91 | + $3.30 |
Southeast
| Steers-Cash | June 8 | Change |
| 400-500 lbs. | $163.43 | + $0.89 |
| 500-600 lbs. | $155.00 | – $0.78 |
| 600-700 lbs. | $143.77 | + $1.62 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | June 8 ($/cwt) | Change |
| Choice | $226.21 | – $1.32 |
| Select | $203.18 | – $1.62 |
| Ch-Se Spread | $23.03 | + $0.30 |
Futures
| Feeder Cattle | June 8 | Change |
| Aug | $147.275 | + $0.950 |
| Sep | $148.425 | + $1.825 |
| Oct | $148.350 | + $1.925 |
| Nov | $148.500 | + $2.025 |
| Jan ’19 | $145.775 | + $2.600 |
| Mar | $145.125 | + $3.525 |
| Apr | $145.000 | + $3.700 |
| Live Cattle | June 8 | Change |
| Jun | $110.025 | + $5.125 |
| Aug | $105.775 | + $2.150 |
| Oct | $108.200 | + $1.925 |
| Dec | $112.050 | + $1.400 |
| Feb ’19 | $115.650 | + $1.200 |
| Apr | $117.200 | + $1.600 |
| Jun | $110.725 | + $1.125 |
| Aug | $109.400 | + $1.400 |
| Oct | $110.325 | + $1.425 |
| Corn futures | June 8 | Change |
| Jul | $3.776 | – $0.138 |
| Sep | $3.864 | – $0.140 |
| Dec | $3.980 | – $0.136 |
| Mar ’19 | $4.070 | – $0.132 |
| May | $4.130 | – $0.126 |
| Jul | $4.184 | – $0.120 |
| Oil CME-WTI | June 8 | Change |
| Jul | $65.74 | – $0.07 |
| Aug | $65.67 | – $0.10 |
| Sep | $65.40 | – $0.13 |
| Oct | $65.06 | – $0.17 |
| Nov | $64.91 | – $0.10 |
| Dec | $64.73 | – $0.05 |
Equities
| Equity Indexes | June 8 | Change |
| Dow Industrial Average | 25316.53 | + 681.32 |
| NASDAQ | 7645.51 | + 91.18 |
| S&P 500 | 2779.03 | + 44.41 |
| Dollar (DXY) | 93.43 | – 0.75 |