Markets started the week with a negative tone and ended on an even darker note, with pressure from the percolating trade war with China.
Although there were instances of higher prices for thin-fleshed calves and feeder cattle suited to grazing, the overall trend was solidly lower. Steers and heifers sold $3-$10/cwt. lower, according to the Agricultural Marketing Service (AMS), except for generally $2-$5 lower in the Southeast.
“Feedlots are in no hurry to buy cattle as pen space is limited,” said AMS analysts. “There are concerns of a large number of market-ready cattle in the next quarter, which has the industry looking bearish. Demand for calves has dwindled at the moment as cattle grazers have filled their orders.”
Feeder Cattle futures closed an average of $3.57 lower, week to week on Friday; an average of $6.59 lower over the last two weeks.
“Though a cash price decline should be expected given losses in the futures market, lightweight calf prices are beginning to move lower, when the seasonal tendency would be for a few more weeks of stronger prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This could mean the spring price peak for lightweight calves has already been witnessed and softness can be expected through the remainder of the spring months, as well as the summer and fall months. If the apex on calf prices has been reached, there will likely be a long arduous path to the fall lows.”
Despite continued snug front-end supplies of fed cattle, deteriorating futures prices and the strong basis encouraged cattle feeders to pull the trigger at lower prices.
Negotiated cash fed cattle prices were $1 lower in the Southern Plains at $126 per cwt. Live prices in the Northern Plains were $2-$3 lower at mostly $126. Prices were also $2-$3 lower in the western Corn Belt at $126-$128. Dressed trade was $2-$5 lower at $200-$203.
Live Cattle futures closed an average of $3.00 lower week to week on Friday, with most pressure in the nearby contracts.
“One hint of negative sentiment was in the finished cattle market one week ago as cash prices fell below year-ago prices for the first time since September,” Griffith says. “A little more negative sentiment was in the market this week as finished cattle prices softened and cattle feeding margins tightened. Though finished cattle prices are softer, the bigger story is the strong basis at which live cattle are trading. Based on this week’s market, live cattle traded $6 to $7 higher than the April futures contract. The expectation is for the cash price and futures price to converge as the market moves toward the expiration of the April contract. With that being said, serious price movement will have to occur from futures, cash, or both to see convergence.”
Choice boxed beef cutout value was $2.50 lower week to week on Friday at $223.09 per cwt. Select was 46¢ lower at $216.40.
“One aspect of the beef market that has added value is the percentage of cattle grading Choice and Prime,” Griffith says. “For the week ending Mar. 10, 8.4% of cattle graded Prime, resulting in the fifth consecutive week of 8% or better grading Prime. Similarly, the percent of cattle grading Choice has stayed in the range of 72-73% during those five weeks. Higher-grading cattle allow more beef to be moved into higher-valued food service outlets and thus return more value to the industry.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Mar. 23 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
194,100 (-71,000) |
77,400 (+32,800) |
25,000 (+23,400) |
296,500 (-14,800) |
CME Feeder Index
| CME Feeder Index | Mar. 22 | Change |
| $137.98 | – 4.73 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Mar. 23 | Change |
| 600-700 lbs. | $164.80 | – $5.83 |
| 700-800 lbs. | $146.89 | – $4.05 |
| 800-900 lbs. | $135.56 | – $4.36 |
South Central
| Steers-Cash | Mar. 23 | Change |
| 500-600 lbs. | $171.29 | – $6.61 |
| 600-700 lbs. | $156.70 | – $4.89 |
| 700-800 lbs. | $140.49 | – $4.98 |
| 800-900 lbs. | $130.21 | – $3.38 |
Southeast
| Steers-Cash | Mar. 23 | Change |
| 400-500 lbs. | $173.88 | – $3.20 |
| 500-600 lbs. | $163.12 | – $1.35 |
| 600-700 lbs. | $147.95 | – $2.62 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Mar. 23 ($/cwt) | Change |
| Choice | $223.09 | – $2.50 |
| Select | $216.40 | – $0.46 |
| Ch-Se Spread | $6.69 | – $2.04 |
Futures
| Feeder Cattle | Mar. 23 | Change |
| Mar | $135.700 | – $4.275 |
| Apr | $136.100 | – $4.100 |
| May | $137.300 | – $3.650 |
| Aug | $142.300 | – $3.950 |
| Sep | $143.650 | – $3.725 |
| Oct | $143.875 | – $3.675 |
| Nov | $144.150 | – $3.125 |
| Jan ’19 | $140.500 | – $2.075 |
| Live Cattle | Mar. 23 | Change |
| Apr | $116.050 | – $5.200 |
| Jun | $106.200 | – $5.500 |
| Aug | $104.950 | – $4.175 |
| Oct | $108.925 | – $2.975 |
| Dec | $112.725 | – $2.500 |
| Feb ’19 | $114.300 | – $2.300 |
| Apr | $114.850 | – $1.925 |
| Jun | $109.200 | – $1.475 |
| Aug | $107.875 | – $0.975 |
| Corn futures | Mar. 23 | Change |
| May | $3.772 | – $0.054 |
| Jul | $3.856 | – $0.054 |
| Sep | $3.920 | – $0.046 |
| Dec | $3.992 | – $0.044 |
| Mar ’19 | $4.064 | – $0.040 |
| May | $4.114 | – $0.032 |
| Oil CME-WTI | Mar. 23 | Change |
| May | $65.88 | + $3.47 |
| Jun | $65.71 | + $3.46 |
| Jul | $65.29 | + $3.35 |
| Aug | $64.74 | + $3.25 |
| Sep | $64.16 | + $3.13 |
| Oct | $63.56 | + $3.01 |
Equities
| Equity Indexes | Mar. 23 | Change |
| Dow Industrial Average | 23533.20 | – 1413.31 |
| NASDAQ | 6992.67 | – 489.32 |
| S&P 500 | 2588.26 | – 163.75 |
| Dollar (DXY) | 89.49 | – 0.70 |