Cattle Current Weekly Highlights—Week ending Nov. 15, 2019

Cattle Current Weekly Highlights—Week ending Nov. 15, 2019

Firm negotiated cash fed cattle trade and wholesale beef values continued to help bolster calf and feeder cattle prices last week, while futures prices softened slightly.

Steers and heifer sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Auction receipts were somewhat tempered this week with early-week sales dealing with severely cold temperatures and frozen precipitation making travel hazardous from Missouri up through the Northern Plains and into the Upper Midwest,” say AMS analysts. “Most buyers at auctions were order buyers, as the true farmer-feeder is still in the combine trying to get the late crop out before adverse weather stops them. With large sales of calves across the nation, buyers are spread out and some sales felt the effects of light buyer attendance.”

Feeder Cattle futures closed an average $1.30 lower week to week on Friday. That included a mid-week average decline of $3.13.

“The sharp losses in the Feeder Cattle contracts found fund managers rolling to the January contract and beyond,” explain AMS analysts.

Rather than the beginning of a correction, one could argue retrenchment ahead of what looks to be a higher trending market.

Andrew P. Griffith, agricultural economist at the University of Tennessee suggests producers with spring-born calves left to sell may be rewarded if they wait a little longer.

“There is a good chance the price increase from today until the middle of January will exceed any negative tax implications,” Griffith says, in his weekly market comments. “For stocker producers, continue buying cattle at low prices because the payout in four or five months looks advantageous.”

Cash Fed Cattle Maintain Recent Gains

Negotiated cash fed cattle trade ended the week mainly steady to $1 higher at $115/cwt. on a live basis and at $182 in the beef, based on USDA reports.

According to AMS, cattle slaughter under federal inspection last week was estimated at 657,000, which would be 6,000 more than the previous week and 9,000 more than a year earlier.

Live Cattle futures closed an average of 51¢ lower week to week on Friday (2¢ to 90¢ lower).

Choice boxed beef cutout value was $1.68 higher week to week on Friday at $240.80/cwt. Select was $1.07 higher at $214.33.

During a Tuesday conference call to share the company’s fourth-quarter fiscal results, Noel White, Tyson CEO said the company expects to have its southwest Kansas plant—shuttered by the Aug. 9 fire—fully operational within 60 days, and potentially sooner.

“There is a good possibility that some portion of finished cattle will trade as high as $120 before the end of the year if the current trend holds, which will further support prices within the cattle complex,” Griffith says. “The support for finished cattle prices may be stemming from the thought that there are not as many cattle out in the country as was first thought. If this is truly the case, then finished cattle prices will be well supported in the spring with a target price exceeding $130.”

Wonderments about the number of cattle relative to previous estimates have to do with cattle slaughter.

Through Nov. 2, total cattle slaughter was a little more than 1% more than the same period last year, according to AMS.

“Heifer slaughter is over 7% greater than a year ago, while steer slaughter is nearly 3% below a year ago. Year-to-date cow slaughter is nearly 3% higher than a year ago, as well,” explain AMS analysts. “With these data points brought to the forefront, there is no doubt that the cattle herd has got to be contracting at this point. High costs of production in the cow-calf sector have got to be a factor in this pullback. Also, cow-calf producers nationwide are getting older. Some have the winter of 2018-2019 fresh in their minds and are not wanting to take on Old Man Winter again. There have already been auctions advertising herd liquidations in the Plains states before the end of the year.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 15

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

299,000

(-61,400)

51,200

(+1,600)

4,000

(-19,900)

354,200

(-79,700)

 

CME Feeder Index

CME Feeder Index* Nov. 14 Change
  $147.12 +  $1.28

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 15 Change
600-700 lbs. $152.08 + $1.65
700-800 lbs. $150.08 + $0.96
800-900 lbs. $149.89 + $2.17

 

South Central

Steers-Cash Nov. 15 Change
500-600 lbs. $153.27 + $0.80
600-700 lbs. $146.55 + $0.34
700-800 lbs. $147.11 + $1.16

 

Southeast

Steers-Cash Nov. 15 Change
400-500 lbs. $144.60 + $0.19
500-600 lbs. $135.58 –  $0.48
600-700 lbs. $130.96 –  $0.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 15 ($/cwt) Change
Choice $240.80 + $1.69
Select $214.33 + $1.07
Ch-Se Spread $26.47 + $0.61

 

Futures

Feeder Cattle  Nov. 15 Change
Nov $146.250 –  $0.750
Jan ’20 $144.275 –  $1.600
Mar $144.225 –  $1.275
Apr $145.450 –  $1.375
May $146.075 –  $1.275
Aug $150.475 –  $1.375
Sep $150.850 –  $1.375
Oct $150.725 –  $1.350

 

Live Cattle   Nov. 15 Change
Dec $119.100 – $0.150
Feb ’20 $124.975 – $0.050
Apr $126.075 – $0.025
Jun $117.600 – $0.675
Aug $115.100 – $0.675
Oct $115.950 – $0.900
Dec $118.025 – $0.700
Feb ’21 $119.675 – $0.750
Apr $120.525 – $0.700

 

Corn futures Nov. 15 Change
Dec $3.712 – $0.060
Mar ’20 $3.806 – $0.058
May $3.864 – $0.070
Jul $3.924 – $0.072
Sep $3.910 – $0.052
Dec $3.956 – $0.054

 

Oil CME-WTI Nov. 15 Change
Dec $57.72 + $0.48
Jan ’20 $57.83 + $057
Feb $57.69 + $0.59
Mar $57.37 + $0.60
Apr $56.98 + $0.58
May $56.57 + $0.58

 

Equities

Equity Indexes Nov. 15 Change
Dow Industrial Average  28004.98 + 323.25
NASDAQ   8540.83 +    65.52
S&P 500   3120.46 +     27.38
Dollar (DXY)        98.00 –        0.40
2019-11-17T16:17:49-06:00

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