Judging by calf and feeder cattle auction reports during the week, prices trended generally steady to mixed, receiving more pressure from the futures market as the week progressed. When all was said and done, though, steers and heifers sold $1-5/cwt. higher, with some markets quoted up to $8 higher, according to the Agricultural Marketing Service (AMS) on Monday this week.
Although the price gap narrowed at some of the sales this past week, steers continue to command a heavy premium relative to heifers.
“Demand was moderate to good for calves that were preconditioned and weaned for an appropriate amount of time. Demand was light for calves with no shots or only one round of shots,” AMS analysts say. “With the current price structure of the CME Live Cattle contracts, the best demand is for yearlings and for those big calves that will finish before the summer months.”
“It appears heifer prices are at a larger discount than is typical this time of year,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “With the expectations that the discount will narrow over the next several months—and certain the discount will narrow as weight increases—cow-calf producers may consider holding heifers longer than steers while stocker producers may see this as an opportunity to put together a group of heifers to background.”
Feeder Cattle futures closed an average of $3.06 lower week to week on Friday ($2.40 to $4.35 lower).
“The slightly softer prices in Feeder Cattle futures should not be of much concern to sellers as the market for cattle ready to enter the feedlot remains solid at this time,” says Griffith.
Negotiated cash fed cattle trade was generally steady to $2 lower in the beef at $190-$192/cwt. Live sales were was $1 lower in the Southern Plains and Colorado at $124/cwt. Elsewhere, live sales were steady to $3 lower at $120-$122.
Live Cattle futures closed an average of $3.93 lower through the front four contracts week to week on Friday ($6.72 in spot Dec to $1.30 lower). After that, contracts were an average of 36¢ lower, except for 5¢ higher at the back.
Choice boxed beef cutout value was $5.11 higher week to week on Friday at $213.85 per cwt. Select was $1.43 higher at $194.51.
Griffith notes packers may have some leverage to bump wholesale prices higher with holiday buying at hand.
“It cannot be reiterated enough, the market continues to provide producers value when adding weight in the short term,” Griffith emphasizes. “It is not certain how long this particular scenario will last, but producers should take advantage of this situation since it rarely occurs during the fall marketing time period. Attempting to look further into the future is difficult and less accurate, but producers could hedge nice profits on feeder cattle looking into the first two quarters of 2018.”
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts Nov. 10 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
358,200 (+26,300) |
43,600 (-7,600) |
2,000 (-16,200) |
403,800 (+2,500) |
CME Feeder Index
| CME Feeder Index | Nov. 9 | Change |
| $159.37 | + $0.14 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Nov. 10 | Change |
| 600-700 lbs. | $167.89 | + $8.60 |
| 700-800 lbs. | $161.86 | – $3.46 |
| 800-900 lbs. | $161.49 | – $2.44 |
South Central
| Steers-Cash | Nov. 10 | Change |
| 500-600 lbs. | $167.64 | + $0.84 |
| 600-700 lbs. | $162.39 | + $1.36 |
| 700-800 lbs. | $161.58 | + $1.99 |
Southeast
| Steers-Cash | Nov. 10 | Change |
| 400-500 lbs. | $160.09 | + $2.31 |
| 500-600 lbs. | $152.62 | + $2.98 |
| 600-700 lbs. | $144.59 | + $2.28 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Nov. 10 ($/cwt) | Change |
| Choice | $213.85 | + $5.11 |
| Select | $194.51 | + $1.43 |
| Ch-Se Spread | $19.34 | + $3.68 |
Futures
| Feeder Cattle | Nov. 10 | Change |
| Nov | $158.475 | – $2.400 |
| Jan ’18 | $157.175 | – $4.350 |
| Mar | $155.075 | – $3.275 |
| Apr | $155.250 | – $2.975 |
| May | $154.350 | – $2.950 |
| Aug | $155.825 | – $2.975 |
| Sep | $154.400 | – $2.875 |
| Oct | $152.450 | – $2.650 |
| Live Cattle | Nov. 10 | Change |
| Dec | $120.575 | – $6.725 |
| Feb ’18 | $126.750 | – $5.000 |
| Apr | $127.100 | – $2.700 |
| Jun | $119.875 | – $1.300 |
| Aug | $116.950 | – $0.450 |
| Oct | $116.850 | – $0.325 |
| Dec | $118.050 | – $0.325 |
| Feb ’19 | $118.375 | – $0.350 |
| Apr | $118.025 | + $0.050 |
| Corn futures | Nov. 10 | Change |
| Dec | $3.434 | – $0.048 |
| Mar ’18 | $3.566 | – $0.054 |
| May | $3.652 | – $0.054 |
| Jul | $3.730 | – $0.052 |
| Sep | $3.800 | – $0.044 |
| Dec | $3.892 | – $0.042 |
| Oil CME-WTI | Nov. 10 | Change |
| Dec | $56.74 | + $1.10 |
| Jan 18 | $56.98 | + $1.12 |
| Feb | $57.16 | + $1.18 |
| Mar | $57.28 | + $1.26 |
| Apr | $57.33 | + $1.37 |
| May | $57.28 | + $1.47 |
Equities
| Equity Indexes | Nov. 10 | Change |
| Dow Industrial Average | 23422.21 | – 116.98 |
| NASDAQ | 6750.94 | – 13.50 |
| S&P 500 | 2582.30 | – 5.54 |
| Dollar (DXY) | 94.39 | – 0.52 |