Cattle Current Weekly Highlights—Week ending May 10, 2019

Cattle Current Weekly Highlights—Week ending May 10, 2019

Cattle markets continued to erode last week, pressured by everything from volatile outside markets whipsawed by kneejerk trade emotion, to the cool weather delaying summer grilling demand, to increasing fed cattle supplies.

Nationwide, steers and heifers sold steady to $5/cwt. lower, with instances of $10 lower, according to the Agricultural Marketing Service (AMS).

“Rain and waterlogged fields were the main talk across the breadbasket of the country as cattle receipts were hampered from Kansas to the Dakotas to Illinois and Indiana,” AMS analysts say.

A late-week rally helped Feeder Cattle futures close and average of 89¢ higher week to week on Friday (45¢ to $1.27 higher). The previous two weeks, Feeder Cattle slid about an average of $14 lower.

Oversold conditions and the significant decline in open interest offer hope the rally in Cattle futures represents a turn from the bottom.

“Feeder cattle prices in the cash market moving through summer and fall are now on course to remain steady with the previous six months, given the expectations of Feeder Cattle futures,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Though the past three weeks of futures trading have not been advantageous for folks marketing feeder cattle, there is still time for the market to recover some of its losses. One can never predict prices with 100% certainty, but there may be an opportunity that summer and fall Feeder Cattle futures prices move back to the low $150s which will present a marketing opportunity.”

Moreover, it appears grain prices will remain supportive.

Bearishness Prevails in Grain Markets

Despite wet conditions and late planting that threaten to decrease corn planting,Corn futures were an average of 16¢lower week to week on Friday, through the front six contracts (18¢to 21¢lower). Friday’s monthly World Agricultural Supply and Demand Estimates (WASDE) offered no support.

For instance, analysts with USDA’s Economic Research Service (ERS) projected the 2019-20 season-average farm price for corn 20¢ lowerat $3.30/bu., the lowest since 2006-07.

Likewise, in the latest WASDE, ERS analysts say, “The projected season-average farm price for wheat is $4.70/bu., down from last year’s estimated $5.20 on the expectation of greater export competition and lower U.S. corn prices.”

As for soybeans, WASDE projects the 2019-20 U.S. season-average price at $8.10/bu., down 45¢ from the previous year.

Soybean futures were down about 31¢on average week to week, through the front six contracts.

Fed Cattle Prices Continue Decline

Negotiated cash fed cattle trade continued to lose ground last week. Live sales were $2.00-$4.50 lower at $120/cwt. in the Southern Plains, mostly $121 in Nebraska and $122.00-$122.50 in the western Corn Belt. Dressed trade was $6-$11 lower in Nebraska at $189-$194. It was $8-$10 lower in the western Corn Belt at $190-$192.

“A $6 (per cwt.) loss in two weeks adds up to about $84 per head on an animal finishing at 1,400 lbs.,” Griffith explains. “There is good reason cattle feeders have been willing sellers at lower prices. That reason is the June Live Cattle futures price, which is trading at a $7-$8 discount to this week’s cash price. Cattle feeders are likely wanting to push even more cattle out of pens to keep from being forced to market those cattle on an even lower market than this week.”

Live Cattle futures closed mixed week to week on Friday, from an average of 54¢ lower (10¢ to 97 lower) to an average of 19¢ higher. They were down by about $9 on average the previous two weeks.

As mentioned earlier, cool, wet weather continues to stymie the seasonal increase in grilling demand.

Choice boxed beef cutout value was $6.25 lower week to week on Friday afternoon at $221.11/cwt. Select was $5.83 lower at $207.46.

Although upcoming holidays should offer an expected seasonal boost, cattle numbers and carcass weights are increasing. After months of lower year-over-year dressed steer and heifer weights, they began to draw even and then increase a couple of weeks ago. The average dressed steer weight of 854 lbs. (week ending Apr. 27) was 4 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. Average dressed heifer weights were 6 lbs. heavier at 794 lbs. Fed cattle slaughter for the same week was 14,665 head more at 512,477.

USDA didreduce beef production slightly for this year, in the latest WASDE. The May projection is 27.27 billion lbs., which would be 397 million lbs. more than last year.

“Beef production is forecast higher primarily on higher projected steer and heifer slaughter and heavier carcass weights,” according to ERS analysts.

Although slightly lower month to month, WASDE projects higher fed cattle prices year over year. The annual average fed steer price was projected at $118.50/cwt., compared to $117.12 last year. Prices are forecast at $121 in the second quarter, $113 in the third quarter and $114 in the fourth quarter.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

May 10

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

134,200

(-73,700)

21,300

(-30,300)

22,700

(-15,300)

178,200

(-119,300)

 

CME Feeder Index

CME Feeder Index* May 9 Change
  $135.52 –   5.66

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash May 10 Change
600-700 lbs. n/a n/a
700-800 lbs. n/a n/a
800-900 lbs. n/a n/a

 

South Central

Steers-Cash May 10 Change
500-600 lbs. n/a n/a
600-700 lbs. n/a n/a
700-800 lbs. n/a n/a

 

Southeast

Steers-Cash May 10 Change
400-500 lbs. n/a n/a
500-600 lbs. n/a n/a
600-700 lbs. n/a n/a

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) May 10 ($/cwt) Change
Choice $221.11 –   $6.25
Select $207.46 –   $5.83  
Ch-Se Spread $13.65 –   $0.42

 

Futures

Feeder Cattle  May 10 Change
May $137.625 + $0.475
Aug $146.825 + $0.450
Sep $147.775 + $0.625
Oct $148.750 + $0.975
Nov $149.350 + $1.100
Jan ’20 $146.675 + $1.275
Mar $144.800 + $1.025
Apr $145.650 + $1.225

 

Live Cattle   May 10 Change
Jun $112.450 –   $0.975
Aug $108.900 –   $0.250
Oct $109.025 –   $0.650
Dec $113.075 –   $0.500
Feb ’20 $116.750 +  $0.100
Apr $118.175 +  $0.175
Jun $112.000 +  $0.250
Aug $110.750 +  $0.250
Oct $112.000 –   $0.350

 

Corn futures May 10 Change
May $3.424 –  $0.206
Jul $3.516 –  $0.190
Sep $3.610 –  $0.166
Dec $3.720 –  $0.156
Mar ’20 $3.862 –  $0.134
May $3.960 –  $0.104

 

Oil CME-WTI May 10 Change
Jun $61.66 –  $0.28
Jul $61.80 –  $0.24
Aug $61.86 –  $0.21
Sep $61.83 –  $0.18
Oct $61.70 –  $0.16
Nov $61.49 –  $0.15

 

Equities

Equity Indexes May 10 Change
Dow Industrial Average  25942.37 –   562.58
NASDAQ     7916.94 –   247.06
S&P 500     2881.40 –     64.24
Dollar (DXY)          97.32 –        0.13
2019-05-12T15:00:13-06:00

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.