There are market guttings, then there’s last week as panic over COVID-19 wreaked havoc.
Week to week on Friday:
Feeder Cattle futures closed an average of $17.48 lower.
Live Cattle futures closed an average of $11.32 lower.
The Dow Jones Industrial Average closed 2,679 points lower. The S&P 500 closed 261 points lower. The NASDAQ was down 700 points. And that was after a significant rally Friday.
West Texas Intermediate Crude Oil futures on the CME were an average of $8.98 lower through the front six contracts.
“The sheer uncertainty in the worldwide marketplace is driving a massive downward trend in the livestock sector,” explained analysts with the Agricultural Marketing Service (AMS). “The CME Cattle Complex has taken the brunt of losses in the ag sector, but grains have reported losses as well.”
Nationwide, steers and heifers sold $5-$10/cwt. lower, according to AMS. Declines were significantly steeper at some auctions. Producers cancelling consignments was common.
“The calf market is easily $10-$12/cwt. lower than where it was expected to be this time a couple of months ago,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The question on every market participants mind is when the fortunes of the market will turn in favor of increasing prices. The answer is that it may take a while for the coronavirus scare to subside, which means it may take a while for the market to return to normalcy.”
As such, Griffith says it’s difficult to recommend anyone sell calves in such a market. On the other hand, he points out even more dollars will be lost by holding cattle if the market fails to rebound.
Perhaps thanks to trade taking place earlier in the week, negotiated cash fed cattle trade was established at $110/cwt. on a live basis last week, which was $3 lower in the Southern Plains and Nebraska; $2-$5 lower in the western Corn Belt. Dressed sales were $5-$7 lower at $175-$176. There were trades at lower money later in the week, but too few to trend.
Wholesale beef values continue to fade much of the market pressure. Choice boxed beef cutout value was 67¢ higher week to week on Friday at $208.14/cwt. Select was 59¢ lower at $201.98.
“As more and more events are canceled, suspended, or postponed, fewer patrons will be making their way to restaurants and eating meals away from home,” Griffith says. “As consumer movement declines, there will likely be more meals consumed at home. Will these meals include beef as the main course or will consumers move to other meats such as poultry and pork? Regardless of what meats are consumed at home, record meat production is expected in the United States this year, and clearing the market will take increased consumption domestically and moving meat overseas.”
Although no one would be surprised to see reduced U.S. beef exports in February and March, as the world deals with COVID-19, the year began positively, offering optimism once business disruptions fade.
U.S. beef exports in January were 2.5% more than a year earlier at 107,347 metric tons (mt) and export value was 5% more at $672.7 million according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
In fact, beef muscle cut exports were the highest ever for the month of January at 81,342 mt, up 4% from a year ago, while muscle cut value increased 5% to $589.2 million.
Export value per head of fed slaughter was $302.93, up 3% from a year ago.
Friday to Friday Change
Weekly Auction Receipts
| Mar. 13 | Auction | Direct |
Video/net |
Total |
|
174,600 (-4,600) |
22,000 (-24,000) |
1,900 (-26,400) |
198,500 (-55,700) |
CME Feeder Index
| CME Feeder Index* | Mar. 12 | Change |
| $127.91 | – $5.96 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Mar. 13 | Change |
| 600-700 lbs. | $151.50 | – $5.22 |
| 700-800 lbs. | $135.88 | – $7.77 |
| 800-900 lbs. | $125.85 | – $6.77 |
South Central
| Steers-Cash | Mar. 13 | Change |
| 500-600 lbs. | $158.19 | – $8.56 |
| 600-700 lbs. | $143.85 | – $5.12 |
| 700-800 lbs. | $126.19 | – $10.61 |
Southeast
| Steers-Cash | Mar. 13 | Change |
| 400-500 lbs. | $155.45 | – $8.36 |
| 500-600 lbs. | $143.13 | – $8.20 |
| 600-700 lbs. | $132.34 | – $7.25 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Mar. 13 ($/cwt) | Change |
| Choice | $208.14 | + $0.67 |
| Select | $201.98 | – $0.59 |
| Ch-Se Spread | $6.16 | + $1.26 |
Futures
| Feeder Cattle | Mar. 13 | Change |
| Mar | $113.000 | – $17.700 |
| Apr | $112.600 | – $17.450 |
| May | $114.475 | – $16.750 |
| Aug | $121.275 | – $17.225 |
| Sep | $122.275 | – $17.650 |
| Oct | $122.925 | – $17.775 |
| Nov | $123.250 | – $17.750 |
| Jan ’21 | $122.150 | – $17.525 |
| Live Cattle | Mar. 13 | Change |
| Apr | $95.575 | – $10.175 |
| Jun | $89.750 | – $10.275 |
| Aug | $89.175 | – $11.900 |
| Oct | $93.800 | – $12.400 |
| Dec | $98.700 | – $11.775 |
| Feb ’21 | $101.975 | – $11.475 |
| Apr | $103.800 | – $11.200 |
| Jun | $97.550 | – $11.325 |
| Aug | $95.650 | – $11.325 |
| Corn | Mar. 13 | Change |
| Mar | $3.706 | – $0.066 |
| May | $3.656 | – $0.104 |
| Jul | $3.684 | – $0.108 |
| Sep | $3.676 | – $0.098 |
| Dec | $3.730 | – $0.084 |
| Mar ’21 | $3.826 | – $0.090 |
| Oil CME-WTI | Mar. 13 | Change |
| Apr | $31.73 | – $9.55 |
| May | $32.11 | – $9.40 |
| Jun | $32.59 | – $9.18 |
| Jly | $33.15 | – $8.89 |
| Aug | $33.74 | – $8.59 |
| Sep | $34.36 | – $8.28 |
Equities
| Equity Indexes | Mar. 13 | Change |
| Dow Industrial Average | 23185.62 | – 2796.16 |
| NASDAQ | 7874.88 | – 700.74 |
| S&P 500 | 2711.02 | – 261.35 |
| Dollar (DXY) | 98.69 | + 2.60 |