Cattle Current Weekly Highlights—Week ending June 28, 2019

Cattle Current Weekly Highlights—Week ending June 28, 2019

Calves and feeder cattle sold from $3/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). Analysts there note that some auctions reported instances of $8-$10 higher.

“Many loads of yearlings were in the supply this week as several barns held pre-Fourth of July special sales,” explain AMS analysts. “Cattle feeders had the opportunity to make like-kind purchases and they were willing to step in and own them, especially after the CME Cattle Complex moved sharply higher on Wednesday.”

Feeder Cattle futures closed an average of $1.99 higher week to week on Friday ($1.32 higher to $3.17 higher in spot Aug). That included the aforementioned mid-week bounce on over-sold conditions.

“Following a nearly $30/cwt. decline in Feeder Cattle futures from the middle of April to the end of May, most contracts have traded in a $10 range during June,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A range of $10 appears small when comparing

it to a change of $30, but a $10 price range on a Feeder Cattle contract is $80 per head or $5,000 per contract.

Friday’ s Acreage report provided lift with USDA reporting producers intended to plant 91.7 million acres of corn, up 3% from last year. That’s less than the 92.8 million acres estimated in the March Prospective Plantings report, but more than the 89.8 million acres estimated by the World Agricultural Outlook Board in the June World Agricultural Supply and Demand Estimates, and about 5 million acres more than average estimates ahead of the report.

Corn futures closed an average of 20¢ lower through the front six contracts week to week on Friday.

“From a longer term perspective, the probability of correctly predicting the price direction is much easier than in the near term,” Griffith says. “For instance, feeder cattle and calf prices are fairly low on the cash market and the futures market. Seasonal trends would suggest calf prices will decline further moving through the summer and fall, while feeder cattle prices are expected to garner some support. For anyone expecting to market cattle before the end of the year, do not expect prices to have a miraculous resurgence. Alternatively, today’s cattle market is soft. It would take something catastrophic to send calf and feeder cattle prices severely lower. Most producers know when they will be marketing cattle so

they should start early considering ways to price those cattle at profitable levels.”

Fed Cattle Prices Appeared Mostly Sideways

Negotiated cash fed cattle trade began to develop by late Friday afternoon, but there were too few transactions to trend in any region.

Early live sales in the Southern Plains were at $109/cwt. on a live basis, in the middle of the previous week’s trading range. The Texas Cattle Feeders Association also reported its members trading at $109. Early live sales in Nebraska were steady to higher at $109.00-$111.50. In the western Corn Belt, though, the $109-$112 for early live sales was $1-$3 less than the previous week. Earlier week dressed sales in the latter two regions were at $180, which was steady in Nebraska and steady to lower in the western Corn Belt.

Through Thursday, the 5-area direct weighted average live price for steers was $110.58/cwt., about even with the previous week.

Live Cattle futures closed an average of $1.38 higher week to week on Friday (42¢ higher to $3.95 higher in expiring Jun).

Choice boxed beef cutout value was 16¢ lower week to week on Friday afternoon at $219.66/cwt. Select was $3.99 lower at $195.56.

“The lack of summer thus far has limited seasonal beef demand,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “After early beef buying in April for Memorial Day, boxed beef cutout values have weakened, averaging 3.8% lower year over year for the last six weeks. The daily boxed beef price last Friday (June 21) was down 6.2% from the peak price in late April. The weakness has been most pronounced in the high value middle meats, with loin primals averaging 7.9% lower year over year for the last six weeks and rib primals averaging 5.5% lower year over year for the same period. Chuck and round primals have fared somewhat better with round primals down only 1.8% year over year and chuck primals up an average of 1.3% over the last six weeks, compared to the same period last year…Encouragingly, the ground beef market is showing a little life with both lean trimmings and 50% trimmings currently priced a bit higher compared to last year.”

Moreover, Griffith says recently stronger retail prices are helping reduce frozen beef inventories.

“The quantity of beef in cold storage at the end of May totaled 403.6 million lbs., which was 106.7 million lbs. less than the end of January and the lowest level of beef in cold storage since November 2014,” Griffith explains. “The all fresh retail price of beef in May was $5.89/lb. which was 21¢/lb.higher than May 2018 and 19¢/lb.higher than January 2019. The strong retail value of beef has provided incentive to pull beef out of storage and capture a strong margin.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

June 28

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

156,200

(+300)

35,700

(-5,900)

46,100

(+31,100)

238,000

(+25,500)

 

CME Feeder Index

CME Feeder Index* June 27 Change
  $132.613 + 1.18

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 28 Change
600-700 lbs. $164.18 + $10.68
700-800 lbs. $148.35 + $7.14
800-900 lbs. $136.83 –  $0.12

 

South Central

Steers-Cash June 28 Change
500-600 lbs. $155.93 –  $2.35
600-700 lbs. $146.96 –  $0.97
700-800 lbs. $137.99 +  $2.71

 

Southeast

Steers-Cash June 28 Change
400-500 lbs. $146.62 –  $0.94
500-600 lbs. $140.81 +  $1.62
600-700 lbs. $133.24 +  $2.67

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 28 ($/cwt) Change
Choice $219.66 –   $0.16
Select $195.56 –   $3.99  
Ch-Se Spread $24.10 +  $3.83

 

Futures

Feeder Cattle  June 28 Change
Aug $136.850 + $3.175
Sep $136.700 + $2.650
Oct $136.700 + $2.200
Nov $136.875 + $2.000
Jan ’20 $135.075 + $1.600
Mar $134.025 + $1.325
Apr $135.500 + $1.400
May $135.875 + $1.600

 

Live Cattle   June 28 Change
Jun $110.500 + $3.950
Aug $104.350 + $2.125
Oct $105.425 + $1.275
Dec $110.250 + $1.225
Feb ’20 $114.125 + $0.750
Apr $116.225 + $0.925
Jun $109.100 + $1.000
Aug $107.500 + $0.750
Oct $109.425 + $0.425

 

Corn futures June 28 Change
Jul $4.202 –  $0.220
Sep $4.246 –  $0.228
Dec $4.314 –  $0.220
Mar ’20 $4.394 –  $0.198
May $4.430 –  $0.184
Jul $4.460 –  $0.172

 

Oil CME-WTI June 28 Change
Aug $58.47 + $0.97
Sep $58.52 + $1.10
Oct $58.40 + $1.15
Nov $58.22 + $1.18
Dec $57.98 + $1.19
Jan ’20 $57.71 + $1.19

 

Equities

Equity Indexes June 28 Change
Dow Industrial Average  26599.96 –  119.17
NASDAQ     8006.24 –   25.47
S&P 500     2941.76 –     8.70
Dollar (DXY)          96.13 +    0.04
2019-06-29T17:05:28-06:00

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