Despite pressure on Cattle futures—from the Cattle on Feed report early and then Lean Hog Futures—cash steers and heifers traded steady to $5/cwt. higher, according to the Agricultural Marketing Service (AMS).
“In many places that have been wet all winter, the ground started to dry early to mid week, giving way for pasture repairs and field work,” say AMS analysts. “Ranchers were trying to catch up and beat another rain event late week by fertilizing pastures while the ground had some firmness to it.”
Feeder Cattle futures closed an average of $2.55 lower week to week on Friday (47¢centslower to $5.27 lower). That doesn’t count expiring spot Mar or new away Mar.
“The calf and feeder cattle markets continue displaying a lack of continuity as the calf market showed considerable strength, while the feeder cattle market held the status quo,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “There does appear to be some optimism in the feeder cattle market as the August feeder cattle futures price is trading at an $11 premium to the April contract. What does this mean for the future? It means the cash price has a long way to go and a spring and summer to get there or the futures market is over-valuing feeder cattle. The educated guess at this point is that the cash price of feeder cattle will begin a strong advancement to the upside in the coming months to fall more in line with what is expected for live cattle.”
Fed Cattle Prices Move Lower
Through late Friday afternoon, negotiated cash fed cattle prices for the week were mostly $2-$3 less on a live basis at $125-$126/cwt. in the Southern Plains, mostly $126 in Nebraska and mostly $128 in the western Corn Belt. Dressed trade was also $2-$3 lower at $206 in Nebraska and at $205 in the western Corn Belt.
There’s plenty of speculation about whether the previous week represents the seasonal high or fed cattle prices have one more surge left.
Except for 45¢ higher in the back contract, Live Cattle futures closed an average of $3.08 lower (75¢ to $4.50 lower)—week to week on Friday.
“Analysts are looking at current cattle weights under federal inspection and looking at the tonnage impact going into summer,” say AMS analysts. “Since the week ending Dec. 29 last year, steer dressed weights declined 31 lbs. compared to a 25 lb. decline the same time period a year ago.”
Choice wholesale beef value was $3.05 lower week to week on Friday at $226.04/cwt. Select was 25¢ higher at $218.89.
“Wholesale Choice boxed beef prices declined for the first time in eight weeks, which means the price of Choice beef increased from the beginning of February through last week before faltering to close out the month of March,” Griffith says. “During the price run, Choice beef prices increased $15/cwt. while Select box prices only increased $5. Some of the price support in the beef market through the first quarter of 2019 could be considered artificial to some degree, due to reduced steer slaughter. However, the other portion of the support is not a manipulation of production and quantity of beef supplied. It is true supply and demand determining prices with lighter carcass weights that are a function of the tough feeding conditions across much of cattle feeding country and strong demand for high valued beef cuts.”
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index*||Mar. 28||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$166.52||+ $3.46|
|700-800 lbs.||$151.73||+ $2.15|
|800-900 lbs.||$140.38||– $0.57|
|500-600 lbs.||$174.85||+ $4.58|
|600-700 lbs.||$159.03||+ $3.22|
|700-800 lbs.||$143.62||– $0.27|
|400-500 lbs.||$164.60||– $3.59|
|500-600 lbs.||$156.86||+ $0.18|
|600-700 lbs.||$143.52||– $1.00|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Mar. 29 ($/cwt)||Change|
|Ch-Se Spread||$7.15||– $3.30|
|Feeder Cattle||Mar. 29||Change|
|Jan ’20||$154.750||– $0.475|
|Live Cattle||Mar. 29||Change|
|Feb ’20||$122.250||– $2.350|
|Corn futures||Mar. 29||Change|
|Mar ’20||$3.970||– $0.132|
|Oil CME-WTI||Mar. 29||Change|
|Equity Indexes||Mar. 29||Change|
|Dow Industrial Average||25928.68||+ 426.36|
|S&P 500||2834.40||+ 33.69|
|Dollar (DXY)||97.24||+ 0.64|