Markets continued sideways to stronger amid strong packer demand for fed cattle and heavy auction receipts for calves and feeders.
Nationwide, steers and heifers traded from $2/cwt. lower to $2 higher according to the Agricultural Marketing Service (AMS). It was the first week in about a year that regional calf and feeder prices were mostly lower year over year, based on data from the National Weekly Feeder and Stocker Cattle Summary.
“Feeder cattle buyers have purchased replacement feedlot cattle on either side of steady this week as the market is looking for direction from any type of news that could hit the airwaves,” AMS analysts say. They add that the week’s auction volume at just over 250,000 head was the second most since early February.
Other than 7¢ to 50¢ higher in Jan-Mar, Feeder Cattle futures closed an average of $1.52 lower week to week on Friday.
Negotiated cash fed cattle trade was $2 higher in the Southern Plains at $126/cwt. on Thursday. Elsewhere, prices trended generally steady to either side of even.
AMS analysts note that weekly negotiated cash trading volume in Kansas topped 30,000 head for the second week in a row, the first time since January 2016. They add that the rolling three-week average of negotiated trading volume in TX/OK/NM surpassed 10,000 head for only the second time in a year.
Other than 35¢ and 72¢ higher in away Jun and Aug, Live Cattle futures closed an average of 75¢ lower week to week on Friday (2¢ lower to $1.15 lower).
“The negative $20 basis on June Live Cattle continued this week. Futures traders continue to be very bearish on the market with expectations of live cattle collapsing in the next few weeks. This expectation is led by an increase in cattle coming off feed in the next couple of months,” says Andrew P. Griffith, agricultural economist with the University of Tennessee, in his weekly market comments. “As a cattle feeder, this could be cause for concern as a $20/cwt. price decline could be devastating. However, it may offer the opportunity to price as many cattle out in the future today for a small discount and then take advantage of a possible arbitrage situation in the futures market. It is not likely June futures will be below its current price at expiration, as convergence will come from a declining cash price and an increasing futures price.”
Choice boxed beef cutout value was $6.56 higher week to week on Friday at $228.30/cwt. Select was $5.17 higher at $209.49.
“Choice boxes are trading at their highest price level in over 10 months but are still about $6 lower than the same week one year ago,” Griffith says. “The price surge the past few weeks for Choice beef is being led by the loin and rib primal as retailers and food service participants are seeking middle meats to meet consumer demand. The rib primal price has increased a little over $30/cwt. in the past two weeks while the loin primal price has increased about $40. This is a very seasonal price movement as retailers are making purchases to fulfill the summer holiday demand which kicks off with Memorial Day weekend.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts May 4 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
250,300 (+15,800) |
65,000 (+6,900) |
61,000 (+57,400) |
376,300 (+80,100) |
CME Feeder Index
| CME Feeder Index | May 3 | Change |
| $137.90 | – 2.09 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | May 4 | Change |
| 600-700 lbs. | $167.97 | – $0.76 |
| 700-800 lbs. | $152.18 | – $0.12 |
| 800-900 lbs. | $137.89 | – $2.38 |
South Central
| Steers-Cash | May 4 | Change |
| 500-600 lbs. | $169.51 | – $0.41 |
| 600-700 lbs. | $156.68 | – $2.40 |
| 700-800 lbs. | $142.31 | – $1.84 |
Southeast
| Steers-Cash | May 4 | Change |
| 400-500 lbs. | $172.71 | + $2.50 |
| 500-600 lbs. | $158.65 | – $0.41 |
| 600-700 lbs. | $145.19 | – $2.28 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | May 4 ($/cwt) | Change |
| Choice | $228.30 | + $6.56 |
| Select | $209.49 | + $5.17 |
| Ch-Se Spread | $18.81 | + $1.39 |
Futures
| Feeder Cattle | May 4 | Change |
| May | $140.400 | – $1.625 |
| Aug | $146.325 | – $1.925 |
| Sep | $146.775 | – $1.575 |
| Oct | $147.000 | – $1.200 |
| Nov | $147.350 | + $0.075 |
| Jan ’19 | $143.775 | + $0.500 |
| Mar | $141.325 | + $0.325 |
| Apr | $139.650 | – $1.250 |
| Live Cattle | May 4 | Change |
| Jun | $106.050 | – $0.950 |
| Aug | $105.075 | – $0.900 |
| Oct | $108.450 | – $0.950 |
| Dec | $112.650 | – $1.150 |
| Feb ’19 | $114.850 | – $0.525 |
| Apr | $115.900 | – $0.025 |
| Jun | $109.800 | + $0.350 |
| Aug | $109.225 | + $0.725 |
| Jun | $110.000 | n/a |
| Corn futures | May 4 | Change |
| May | $3.986 | + $0.092 |
| Jul | $4.062 | + $0.078 |
| Sep | $4.136 | + $0.082 |
| Dec | $4.210 | + $0.066 |
| Mar ’19 | $4.284 | + $0.064 |
| May | $4.330 | + $0.068 |
| Oil CME-WTI | May 4 | Change |
| Jun | $69.72 | + $1.62 |
| Jul | $69.58 | + $1.60 |
| Aug | $69.16 | + $1.53 |
| Sep | $68.62 | + $1.52 |
| Oct | $68.05 | + $1.53 |
| Nov | $67.52 | + $1.55 |
Equities
| Equity Indexes | May 4 | Change |
| Dow Industrial Average | 24262.51 | – 48.68 |
| NASDAQ | 7209.62 | + 89.82 |
| S&P 500 | 2663.52 | – 6.39 |
| Dollar (DXY) | 92.57 | + 1.07 |