Cattle Current Weekly Highlights—Week ending Nov. 6, 2020

Cattle Current Weekly Highlights—Week ending Nov. 6, 2020

Higher Cattle futures and thoughts that low prices may be in the books helped cash calf and feeder cattle prices build on the previous week’s gains.

Steer and heifer calves sold $3-$7/cwt. higher last week, with the most advance at lighter weights, according to the Agricultural Marketing Service (AMS). Yearling steers and heifers sold $2-$5 higher.

“Many Northern Plains farmer-feeders have been fortunate enough to complete their corn harvest and are now taking the time to procure calves for winter feeding,” AMS analysts explain. “Heavily hit drought areas in Nebraska and the Dakotas will no doubt show a lighter-weight bawling calf coming off the cow, but those reputable calves will have some compensatory gain for the new owner, provided that the health program is in order.

Feeder Cattle futures closed an average of $1.32 higher week to week on Friday, from 30¢ higher in spot Nov to $1.80 higher. That makes for an average of $8.23 higher over the last two weeks.

Stronger Cattle futures come in the face of the rally in grain prices, fueled by everything from poor growing conditions in South America to strong exports and the lower U.S. Dollar.

Week to week on Friday, Corn futures closed an average of 10¢ higher through the front six contracts.

In the meantime, recent moisture across the Southern Plains lifted hopes for wheat pasture. Until then, hopes for grazing wheat dwindled amid expanding drought conditions.

“The wheat crop is generally poised to respond quickly to the timely precipitation. Stocker demand may pick back up somewhat in the coming weeks with improvement in the wheat crop,” said Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “…Improved stocker prospects, combined with a sharp recovery in the Feeder Cattle futures markets the previous week, may mean that the seasonal low in calf and stocker prices is past.”

Fed Cattle Prices Gain

Seasonally snugger fed cattle supplies, especially in the Southern Plains, supported fed cattle prices last week.

Negotiated cash fed cattle prices were $1 higher than the previous week in the Southern Plains at $107/cwt. on a live basis, $4-$6 higher in Nebraska at $107/cwt., and $3-$4 higher in the western Corn Belt at $105-$106. Dressed trade was $2-$9 higher at $167, according to the Agricultural Marketing Service.

Live Cattle futures closed an average of $1.71 higher week to week on Friday, from 35¢ higher in spot Dec to $2.40 higher. That’s an average of $5.57 higher over the last two weeks.

“The gains (cash fed cattle prices) should be the start of a slow and steady climb moving into the holiday season,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As has been mentioned previously, there remains uncertainty as it relates to beef movement for the end of the year holidays. However, seasonal beef demand will spur some type of price run that will benefit cattle feeders. The real question is how much of a benefit will it be to cattle feeders. December futures still have Live Cattle trading below $109, but optimism says there is potential to push the Live Cattle market as high as $115 before the end of the year.”

The monthly accumulated five-area direct fed steer price was $106.65/cwt. in October, which was $2.59 more than the previous month, but $2.64 less than the same period last year. The accumulated steer price in the beef was $167.47, which was $4.24 more than the prior month, but $5.15 less than the same time last year.

Wholesale Values Budge Seasonally Higher

“Beef demand in the fourth quarter in recent years has been supportive for cattle prices,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “This number is one we will have to continue to watch this year for signs the U.S. economy is recovering, though all primals are not considered equal in this timeframe. Rib primal values have been the primary benefactor of increased consumer demand in other years while chuck and rounds, seem to have more staying power through the first quarter.”

Choice boxed beef cutout value was $6.22 higher week to week on Friday at $214.32/cwt. Select was $7.25 higher at $198.49.

Hopefully U.S. beef exports will provide more support than recent months, which were challenged by pandemic supply and demand disruptions.

U.S. Beef exports to major Asian markets were about steady with the prior year in September but trended lower overall, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

September beef exports were down 6% from a year ago to 103,277 metric tons (mt), valued at $600.9 million (down 9%). Coming off record performances in August, exports to South Korea and Taiwan remained strong, while setting another new record in China. However, COVID-19 related obstacles continued to negatively impact demand for U.S. beef in several key markets, especially Mexico, Central America and the Caribbean.

“Although restaurant traffic and foodservice activity are not back to normal in most Asian markets, USMEF is very encouraged by the recovery in Asia and this was especially evident in the strong August and September exports of U.S. beef to Korea, Taiwan and China,” according to Dan Halstrom, USMEF president and CEO. “As we close out the year, U.S. beef has a great opportunity to capture greater market share in Asia due to tightening supplies from Australia. While it will require more time, we also expect U.S. beef to regain momentum in regions where beef demand depends more heavily on travel and tourism, and where e-commerce channels are not as well-developed.”

For January through September, beef exports trailed last year’s pace by 8% in volume (911,936 mt) and 9% in value ($5.55 billion).

You can find a detailed summary of U.S. beef and pork exports at the USMEF website.

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 6 Auction Direct

Video/net

Total
 

222,900

(+35,400)

26,800

(+15,700)

18,800

(+16,700)

268,500

(+67,800)

 

 

CME Feeder Index

CME Feeder Index* Nov. 5 Change
  $136.63 –   $0.07

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 6 Change
600-700 lbs. $148.21 +  $3.35
700-800 lbs. $141.33 +  $1.60
800-900 lbs. $140.22 +  $2.26

 

South Central

Steers-Cash Nov. 6 Change
500-600 lbs. $148.84 + $7.97
600-700 lbs. $138.57 + $3.64
700-800 lbs. $135.01 + $2.06

 

Southeast

Steers-Cash Nov. 6 Change
400-500 lbs. $147.84 + $8.08
500-600 lbs. $134.26 + $7.89
600-700 lbs. $126.73 + $3.22

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 6 ($/cwt) Change
Choice $214.32 + $6.22
Select $198.49 + $7.25
Ch-Se Spread $15.83 –  $1.03

 

Futures

Feeder Cattle  Nov. 6 Change
Nov $137.700 + $0.300
Jan ’21 $135.925 + $1.800
Mar $135.175 + $1.650
Apr $136.550 + $1.500
May $137.400 + $1.650
Aug $143.125 + $0.775
Sep $144.000 + $1.425
Oct ’21 $144.225 + $1.425

 

Live Cattle   Nov. 6 Change
Dec $108.650 + $0.350
Feb ’21 $112.150 + $1.750
Apr $116.050 + $2.400
Jun $110.025 + $2.150
Aug $109.175 + $1.850
Oct $111.975 + $1.800
Dec $115.250 + $1.775
Feb ’22 $117.300 + $1.100
Apr $118.400 + $2.200

 

Corn  Nov. 6 Change
Dec $4.066 + $0.082
Mar ’21 $4.136 + $0.104
May $4.176 + $0.116
Jly $4.202 + $0.130
Sep $3.692 + $0.090
Oct $3.954 + $0.082

 

Oil CME-WTI Nov. 6 Change
Dec $37.14 + $1.35
Jan ’21 $37.49 + $1.34
Feb $37.90 + $1.33
Mar $38.34 + $1.34
Apr $38.74 + $1.34
May $39.10 + $1.34

 

Equities

Equity Indexes Nov. 6 Change
Dow Industrial Average  28323.40 +  1821.80
NASDAQ  11895.23 +   983.64
S&P 500   3509.44 +   239.48
Dollar (DXY)       92.24 +        1.64
2020-11-08T14:00:56-06:00

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