Cattle Current Weekly Highlights—Week ending March 26, 2021

Cattle Current Weekly Highlights—Week ending March 26, 2021

Negotiated cash fed cattle prices finally budged beyond their seven-week rut and wholesale beef values continued to make seasonal gains. Both helped support higher Cattle futures prices for the week. All of that and the fast approaching grass season helped calves and feeder cattle trade from steady to mainly higher, based on the weekly auctions monitored by Cattle Current.

Steers and heifers sold steady to $5/cwt. higher, except for $4-$7 higher in the Northern Plains, according to the Agricultural Marketing Service (AMS).

“Demand was good to very good as order buyers were aggressive at filling the needs of feedlot managers and backgrounders,” say AMS analysts. “The supply of lightweight cattle continues to be tight which is keeping that market red hot…”

“Calf and feeder cattle prices are attempting to push higher as grass fever heats up and as many Feeder Cattle futures contracts tested contract highs this week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee (UT), in his weekly market comments. “… Feeder Cattle futures are offering a great opportunity to hedge a strong price on cattle that will be marketed between August and November.”

Specifically, Griffith explains those contracts offer a 150 to 240-day  backgrounding period to capitalize on current prices, while offering a wide marketing window. In the meantime, he notes cool-season grasses are about two weeks ahead of schedule in the Southeast.

Feeder Cattle futures closed an average of $3.18 higher week to week on Friday (60¢ higher at the back to $5.70 higher in spot Apr).

The CME Feeder Cattle Index was $2.72 higher week to week on Thursday at $136.75.

“There is some concern by cattle producers that higher feed prices could put significant pressure on feeder cattle prices, but that is not a concern if one takes advantage of what the market is currently offering in the form of price risk management,” Griffith says.

Consolidating to lower Corn futures prices added optimism to cattle markets. Corn futures closed an average of 4.6¢ lower through the front six contracts, week to week on Friday.

“December corn is approaching a key support level of $4.60/bu.. If prices fall below $4.60, the next level of support will be $4.40,” says Aaron Smith, UT crops marketing specialist , in his weekly market comments. “Next week’s Prospective Plantings report (Mar. 31) could provide a major push (up or down) for corn prices depending on USDA estimates. Current estimates are 92 million acres of corn and 90 million acres of soybeans. The harvest price ratio of 2.6 still favors soybeans, but if weather cooperates, many farmers may plant corn. Heading into the report, having some production priced should be strongly considered, as historically, this report has moved markets.”

Cash Fed Cattle Prices Increase

Negotiated cash fed cattle prices were $1-$2 higher last week at $115/cwt. in the Southern Plains and $116 in the Northern Plains, according to  AMS. Dressed trade was $2-$3 higher in Nebraska at $185. Trade was yet to be established in the western Corn Belt, according to AMS, but various reports suggested trade in the region at as much as $3 higher than the previous week.

Week to week on Friday, Live Cattle futures closed an average of $2.08 higher (75¢ higher at the back to $3.10 higher).

“The slight progression in prices this week provide optimism for further price improvement moving through April and into May. The market continues to trade at a large discount to April Live Cattle futures, but cash prices for finished cattle have the ability to push above the $120 price level,” Griffith says.

Meanwhile, wholesale beef prices are making seasonal strides higher.

Choice boxed beef cutout value was $7.67 higher week to week on Friday at $237.66/cwt. Select was $7.82 higher at $227.77.

Plus, optimism continues to grow for the steady pace of COVID-19 vaccinations to continue bringing back some normalcy to markets and everyday life.

“There is considerable optimism for fed cattle markets going forward, beginning in the second quarter and especially in the second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “…Feedlots have been somewhat front-loaded thus far in 2021 which has contributed to the sluggish fed cattle markets in the first quarter of the year. Feedlot supplies should tighten in the second half of the year after working through current inventories.”

Friday to Friday Change

Weekly Auction Receipts

Mar. 29 Auction Direct

Video/net

Total
 

201,200

(+36,800)

42,400

(-19,200)

32,900

(+29,200)

276,500

(+46,800)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 25 Change
  $136.75 +  $2.72

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 29 Change
600-700 lbs. $159.99 +  $7.22
700-800 lbs. $147.64 +  $5.70
800-900 lbs. $138.66 +  $4.65

South Central

Steers-Cash Mar. 29 Change
500-600 lbs. $165.33 +  $1.43
600-700 lbs. $151.52 +  $2.94
700-800 lbs. $139.62 +  $1.55

Southeast

Steers-Cash Mar. 29 Change
400-500 lbs. $162.97 –   $0.12
500-600 lbs. $151.64 +  $1.87
600-700 lbs. $139.04 +  $1.57

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 26 ($/cwt) Change
Choice $237.66 + $7.67
Select $227.77 + $7.82
Ch-Se Spread $9.89 –  $0.15

 

Futures

Feeder Cattle  Mar. 26 Change
Apr $145.125 + $5.700
May $149.875 + $5.200
Aug $158.450 + $3.525
Sep $158.825 + $3.000
Oct  $159.050 + $2.700
Nov $159.000 + $2.400
Jan ’22 $157.350 + $2.350
Mar $155.600 + $0.600

 

Live Cattle   Mar. 26 Change
Apr $120.100 + $1.700
Jun $121.175 + $3.100
Aug $120.875 + $3.100
Oct $124.125 + $2.625
Dec $126.575 + $2.375
Feb ’22 $129.125 + $2.000
Apr $129.850 + $1.750
Jun $124.150 + $1.350
Aug $122.900 + $0.750

 

Corn  Mar. 26 Change
May $5.524 –  $0.052
Jly $5.356 –  $0.030
Sep $4.836 –  $0.058
Oct $4.664 –  $0.050
Mar ’22 $4.746 –  $0.046
May $4.796 –  $0.044

 

Oil CME-WTI Mar. 26 Change
May $60.97 –  $0.47
Jun $60.96 –  $0.35
Jly $60.76 –  $0.25
Aug $60.40 –  $0.17
Sep $59.93 –  $0.12
Oct $59.42 –  $0.08

 

Equities

Equity Indexes Mar. 26 Change
Dow Industrial Average  33072.88 +     444.91
NASDAQ  13138.72 –        76.52
S&P 500    3974.54 +       61.44
Dollar (DXY)         92.72 +         0.80
2021-03-29T14:32:10-06:00

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