Steer and heifer calves sold steady to $5/cwt. lower, while yearlings traded steady to $3 lower, according to the Agricultural Marketing Service (AMS). That was with about 75,000 head more selling at auction than the previous week as the fall calf run ratchets up.
“Receipts were much larger than last week as road conditions improved dramatically in certain areas, with dryer and warmer weather across the Plains,” explained AMS analysts. “In the Northern Plains, calf runs are just getting started and high quality weaned calves are in demand. The demand for un-weaned calves this week was moderate while demand for preconditioned and weaned calves was moderate to good.”
Andrew P. Griffith, agricultural economist at the University of Tennessee notes that promising wheat pasture conditions in the Southern Plains and positive fall forage conditions in the Southeast continue to provide support to calf prices.
“Despite calf demand support, freshly weaned steer and heifer values have the potential to fall below $750 and $650 per head respectively, which would equate to prices declining $5/cwt.,” Griffith says, in his weekly market comments. “The risk of prices declining more than $5/cwt. on freshly weaned calves moving through the rest of fall is relatively small and will likely be short lived if it actually occurs.”
Week to week on Friday, Feeder Cattle futures closed an average of 85¢ lower (5¢ to $1.92 lower)—an average of $4.79 lower in the last two weeks.
Fed Cattle Steady Again
Negotiated cash fed cattle traded about steady for the sixth week in row. Live prices were steady to $2 lower in Nebraska at $109-$111 per cwt, and steady to $1 higher in the western Corn Belt at $109-$110. Dressed trade was steady in Nebraska at $174; steady to $1 lower in the western Corn Belt at $173-$174.
“Prices for live cattle will be expected to move in a positive direction during the fourth quarter,” Griffith says. “The results of the last month and a half may be indicating a moderate fourth quarter increase or it could be setting the stage for a violent surge in prices.”
Week to week on Friday, Live Cattle futures closed narrowly mixed, but mostly lower from an average of 42¢ lower to an average of 52¢ higher.
“The October CME Live Cattle contract continues to run at a premium to cash cattle and nearly 150 certificates were tendered for physical delivery of cattle so far this month,” note AMS analysts.
Wholesale beef value showed signs of seasonal life. Week to week, Choice boxed beef cutout value was $5.22 higher Friday afternoon at $207.93 per cwt. Select was $1.96 higher at $194.24.
“Demand has been a strong supporter of beef prices in 2018, and the expectation is for continued support. However, the market is also aware of increasing production, which will temper the price impact of demand,” Griffith explains. “Similarly, the red meat market is heading into the seasonal production peak for pork. Pork production is seasonally lowest in the summer months before peaking in November and December. The lower prices on hams and other pork products result in serious interest from red meat consumers. Thus, red meat production will keep beef prices from exploding to the upside.”
Feedlot Placements Decline
Feedlot placements in September ran against expectations and recent-month trends with 2.05 million head placed in feedlots with 1,000 head or more capacity. That was 4.60% less (-99,000 head) than a year earlier. Keep in mind there was one less weekday in September this year, according to the most recent Cattle on Feed report.
September marketings of 1.72 million head were 3.59% less (-64,000 head) than the previous year. Expectations ahead of the report were for marketings to be about even.
Cattle on feed Oct. 1 were 11.40 million head, which was 5.43% (+587,000 head) more than last year. Most analysts expected to see about 6% more. Still, it’s the largest Oct. 1 inventory since the data series began in 1996.
Friday to Friday Change*
Weekly Auction Receipts
CME Feeder Index
|CME Feeder Index||Oct. 18||Change|
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
|600-700 lbs.||$159.79||– $6.68|
|700-800 lbs.||$159.79||– $3.14|
|800-900 lbs.||$156.73||– $4.79|
|500-600 lbs.||$160.25||– $0.86|
|600-700 lbs.||$155.37||– $1.45|
|700-800 lbs.||$154.76||– $0.14|
|400-500 lbs.||$156.88||– $0.83|
|500-600 lbs.||$147.54||– $1.00|
|600-700 lbs.||$139.32||– $2.22|
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
|Boxed Beef (p.m.)||Oct. 19 ($/cwt)||Change|
|Ch-Se Spread||$13.69||+ $3.26|
|Feeder Cattle||Oct. 19||Change|
|Jan ’19||$148.750||– $1.000|
|Live Cattle||Oct. 19||Change|
|Feb ’19||$121.150||+ $0.750|
|Feb ’20||$116.400||– $0.475|
|Corn futures||Oct. 19||Change|
|Mar ’19||$3.794||– $0.062|
|Oil CME-WTI||Oct. 19||Change|
|Jan ’19||$69.35||– $1.73|
|Equity Indexes||Oct. 19||Change|
|Dow Industrial Average||25444.34||+ 104.35|
|S&P 500||2767.78||+ 0.65|
|Dollar (DXY)||95.67||+ 0.41|