Rains in some drought-stressed areas helped boost calf and feeder demand, but futures volatility and growing uncertainty about international trade capped advances.
Steers sold $3/cwt. lower to $3 higher, while heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS).
Except for 70¢ higher in spot Aug and $1.47 lower in the back contract, Feeder Cattle futures closed an average of 55¢ lower week to week on Friday.
“As the market moves through the summer, the seasonal trend is for calf prices to soften, while heavier feeder cattle prices strengthen, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Calf prices are expected to soften through the summer and be pressured more moving into the fall marketing time period.”
Negotiated cash fed cattle trade remained undeveloped through late Friday afternoon. The previous week’s stronger prices, as well as the surge in Cattle futures Friday likely added to seller reluctance. On the other end of the trade, it could be that heavy out-front purchases in recent weeks enabled packers to be more patient.
Live Cattle futures closed an average of 96¢ lower week to week on Friday (32¢ lower in the back contract to $1.57 lower in spot Jun).
“May 2018 steer and heifer slaughter is poised to be the largest since 2011 when final numbers are released next week,” AMS analysts say. “According to preliminary numbers, approximately 2.304 million head of steers and heifers were harvested in May 2018, 5.1% above a year ago and 13% higher than the previous three-year average. This week’s cattle harvest, estimated at 654,000 is 4,000 head lower than last week and 15,000 higher than a year ago. Year-to-date cattle slaughter is 3.1% above a year ago. With packer margins per head into triple digits, there will have to be convergence of boxed beef prices and fed cattle prices to slow down chain speeds.”
Projected beef production for this year was lowered by 90 million lbs. in the most recent World Agricultural Supply and Demand Estimates (WASDE), on lower carcass weights more than offsetting increased steer, heifer and cow slaughter in the second quarter. Estimated beef production for this year is 27.125 billion lbs. Estimated beef production next year is 27.175 billion lbs.
WASDE projects the average 5-area Direct fed steer price at $116-$119/cwt. for the second quarter, $106-$112 for the third quarter and $108-$116 for the fourth quarter.
Choice boxed beef cutout value was $4.62 lower week to week on Friday at $221.59/cwt. Select was 45¢ lower at $202.73.
“Demand for boxed beef continues to be strong, even though prices have declined since the most recent highs in May,” AMS analysts say.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts June 15 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
179,900 (-37,400) |
56,400 (+20,900) |
80,200 (+74,100) |
316,500 (+57,600) |
CME Feeder Index
| CME Feeder Index | June 14 | Change |
| $140.73 | + 0.24 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | June 15 | Change |
| 600-700 lbs. | $166.02 | – $0.58 |
| 700-800 lbs. | $152.81 | – $5.84 |
| 800-900 lbs. | $145.00 | + $2.46 |
South Central
| Steers-Cash | June 15 | Change |
| 500-600 lbs. | $164.90 | – $1.03 |
| 600-700 lbs. | $154.58 | – $0.23 |
| 700-800 lbs. | $144.79 | + $0.88 |
| 800-900 lbs. | $136.99 | + $0.50 |
Southeast
| Steers-Cash | June 15 | Change |
| 400-500 lbs. | $160.31 | – $3.12 |
| 500-600 lbs. | $152.40 | – $2.60 |
| 600-700 lbs. | $142.75 | – $1.02 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | June 15 ($/cwt) | Change |
| Choice | $221.59 | – $4.62 |
| Select | $202.73 | – $0.45 |
| Ch-Se Spread | $18.86 | – $4.17 |
Futures
| Feeder Cattle | June 15 | Change |
| Aug | $147.975 | + $0.700 |
| Sep | $148.275 | – $0.150 |
| Oct | $147.850 | – $0.500 |
| Nov | $147.700 | – $0.800 |
| Jan ’19 | $145.025 | – $0.750 |
| Mar | $144.450 | – $0.675 |
| Apr | $144.550 | – $0.450 |
| May | $143.400 | – $1.475 |
| Live Cattle | June 15 | Change |
| Jun | $108.450 | – $1.575 |
| Aug | $104.775 | – $1.000 |
| Oct | $107.025 | – $1.175 |
| Dec | $111.350 | – $0.700 |
| Feb ’19 | $114.775 | – $0.875 |
| Apr | $116.225 | – $0.975 |
| Jun | $109.725 | – $1.000 |
| Aug | $108.400 | – $1.000 |
| Oct | $110.000 | – $0.325 |
| Corn futures | June 15 | Change |
| Jul | $3.612 | – $0.164 |
| Sep | $3.706 | – $0.158 |
| Dec | $3.826 | – $0.154 |
| Mar ’19 | $3.924 | – $0.146 |
| May | $3.990 | – $0.140 |
| Jul | $4.052 | – $0.132 |
| Oil CME-WTI | June 15 | Change |
| Jul | $65.06 | – $0.68 |
| Aug | $64.85 | – $0.82 |
| Sep | $64.40 | – $1.00 |
| Oct | $63.94 | – $1.12 |
| Nov | $63.74 | – $1.17 |
| Dec | $63.52 | – $1.21 |
Equities
| Equity Indexes | June 15 | Change |
| Dow Industrial Average | 25090.48 | – 226.05 |
| NASDAQ | 7746.38 | + 100.87 |
| S&P 500 | 2779.66 | + 0.63 |
| Dollar (DXY) | 94.79 | + 1.36 |