Volatile futures markets and continued pressure from increasing beef production weighed on cattle prices last week. Widespread heavy rain and flooding also hampered and altered calf and feeder cattle marketing.
“Soggy, waterlogged soils are prevalent throughout much of the country and is a far cry from a year ago when the drought monitor had over 25% of the country in a D1 moderate drought designation or worse,” say analysts with the Agricultural Marketing Service (AMS). “Swollen rivers have made transportation of goods up the Mississippi, Ohio and Missouri almost non-existent.”
Nationwide, AMS pegged calf and feeder cattle prices from $3/cwt. lower to $4 higher, with stronger prices later in the week.
Feeder Cattle futures closed an average of $2.63 lower week to week on Friday, with added pressure from rising feed costs.
Only 49% of corn was planted as of May 19, according to the most recent USDA Crop Progress report, which was 29% less than last year and 31% less than the 5-year average. Corn futures closed an average of 20¢ higher through the front six contracts week to week on Friday.
First-quarter prices for feeder steers (700-800 lbs.) in the Southern Plains were $5.76/cwt. less (-3.9%) year over year, according to the Livestock Marketing Information Center (LMIC). Steer calf (500-600 lbs.) prices were down $8.60 (-4.8%). Those analysts expect second-quarter prices to be about 1% higher than last year.
The monthly Cattle on Feed report could offer some support, with about 4.5% fewer April placements than expected, though still 8.67% higher year over year.
Fed Cattle Prices Continue Lower
Negotiated cash fed cattle trade through Friday afternoon last week was generally $1-$2 lower on a live basis at $114-$115/cwt. in the Southern Plains and $116 in Nebraska. It was steady in the western Corn Belt at $116-$118. Dressed trade was steady to $2 lower in Nebraska at $183-$186; steady to $4 lower in the western Corn Belt at $185-$186.
“Despite lower prices in the finished cattle market for the fifth consecutive week, feedlot operators were willing sellers, in order to continue capturing the positive basis,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The cash market price has declined $13 over that five-week period, making it difficult to see the bottom of this price decline. This week’s cash trade resulted in the lowest finished cattle price since November of last year, and should raise a warning sign as the market moves through the soft summer months. The strong downward price movement could be pointing the market toward a weekly summer low near $106/cwt., but the hope will be to hold the line near $110, which will probably be close to the average price for June through August.”
Except for 10¢ and 40¢ lower at either end of the board, Live Cattle futures closed $1.21 lower week to week on Friday.
Wholesale beef values edged higher, though, offering hope that summer grilling demand may finally be at hand.
Choice boxed beef cutout value was $1.33 higher week to week on Friday afternoon at $221.64/cwt. Select was 19¢ higher at $208.47.
As well, beef in freezers as of Apr. 30 totaled 430.35 million lbs. That was 5% less (-40.8 million lbs.) than the previous month and 9% less than the previous year, according to the monthly USDA Cold Storage report published Wednesday. That’s also well below the five-year average of 457 million lbs., according to Allendale, Inc.
Added bullishness from frozen inventory comes with understanding how much beef production began to surge in April.
Beef production in April of 2.26 billion lbs. was 143.8 million lbs. (+6.79%) more than the previous year, according to the monthly USDA Livestock Slaughter report. That was on total federally inspected cattle slaughter of 2.79 million head, which was 189,700 head (+7.30%) more.
For January through April, beef production of 8.67 billion lbs. was 91.7 million lbs. (+1.07%) more year over year. That was on 10.60 million head of cattle slaughtered under federal inspection, which was 248,600 head (+2.40%) more than a year earlier.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts May 24 |
Auction (head) (change) |
Direct (head) (change) |
Video-Net (head) (change) |
Total (head) (change) |
|
130,300 (-18,600) |
45,300 (+16,200) |
1,000 (-15,500) |
176,600 (-17,900) |
CME Feeder Index
| CME Feeder Index* | May 23 | Change |
| $136.81 | + 4.05 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | May 24 | Change |
| 600-700 lbs. | $170.67 | – $2.98 |
| 700-800 lbs. | $161.61 | + $2.85 |
| 800-900 lbs. | $149.64 | + $1.27 |
South Central
| Steers-Cash | May 24 | Change |
| 500-600 lbs. | $164.06 | – $0.33 |
| 600-700 lbs. | $155.52 | + $3.30 |
| 700-800 lbs. | $146.48 | + $8.47 |
Southeast
| Steers-Cash | May 24 | Change |
| 400-500 lbs. | $154.79 | – $4.65 |
| 500-600 lbs. | $145.79 | – $5.00 |
| 600-700 lbs. | $134.57 | – $6.50 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | May 24 ($/cwt) | Change |
| Choice | $221.64 | + $1.33 |
| Select | $208.47 | + $0.19 |
| Ch-Se Spread | $13.18 | + $1.14 |
Futures
| Feeder Cattle | May 24 | Change |
| Aug | $143.225 | – $2.275 |
| Sep | $143.875 | – $2.825 |
| Oct | $144.225 | – $3.100 |
| Nov | $144.850 | – $2.950 |
| Jan ’20 | $142.875 | – $2.700 |
| Mar | $141.725 | – $1.950 |
| Apr | $142.075 | – $2.625 |
| May | $142.600 | n/a |
| Live Cattle | May 24 | Change |
| Jun | $111.175 | – $0.100 |
| Aug | $107.950 | – $0.975 |
| Oct | $107.775 | – $1.125 |
| Dec | $112.100 | – $1.450 |
| Feb ’20 | $116.225 | – $1.725 |
| Apr | $118.250 | – $1.250 |
| Jun | $111.450 | – $0.700 |
| Aug | $110.000 | – $1.250 |
| Oct | $111.500 | – $0.400 |
| Corn futures | May 24 | Change |
| Jul | $4.042 | + $0.210 |
| Sep | $4.124 | + $0.220 |
| Dec | $4.196 | + $0.214 |
| Mar ’20 | $4.292 | + $0.216 |
| May | $4.322 | + $0.190 |
| Jul | $4.344 | + $0.162 |
| Oil CME-WTI | May 24 | Change |
| Jul | $58.63 | – $4.29 |
| Aug | $58.71 | – $4.28 |
| Sep | $58.73 | – $4.25 |
| Oct | $58.66 | – $4.20 |
| Nov | $58.53 | – $4.13 |
| Dec | $58.35 | – $4.04 |
Equities
| Equity Indexes | May 24 | Change |
| Dow Industrial Average | 25585.69 | – 178.31 |
| NASDAQ | 7637.01 | – 179.28 |
| S&P 500 | 2826.06 | – 33.47 |
| Dollar (DXY) | 97.60 | – 0.41 |