Cattle Current Weekly Highlights-Week ending Oct. 19, 2018

Cattle Current Weekly Highlights-Week ending Oct. 19, 2018

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

Receipts

Oct. 19

Auction (head)

(Change)

Direct (head)

(Change)

Video/net (head)

(Change)

Total (head)

(Change)

 

270,300

(+75,300)

25,400

(-7,100)

27,700

(+21,600)

323,400

(+89,800)

 

CME Feeder Index

CME Feeder Index Oct. 18 Change
  $155.36   –   $2.12

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 19  Change 
600-700 lbs. $159.79 –    $6.68
700-800 lbs. $159.79 –    $3.14
800-900 lbs. $156.73 –    $4.79

South Central

Steers-Cash Oct. 19 Change
500-600 lbs. $160.25 –    $0.86
600-700 lbs. $155.37 –    $1.45
700-800 lbs. $154.76 –    $0.14

Southeast

Steers-Cash Oct. 19 Change 
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
Choice $207.93 +  $5.22
Select $194.24 +  $1.96   
Ch-Se Spread $13.69 +  $3.26

 

Futures

Feeder Cattle  Oct. 19 Change
Oct $154.650 –    $0.050
Nov $154.100 –    $0.525
Jan ’19 $148.750 –    $1.000
Mar $147.050 –    $1.925
Apr $148.275 –    $1.525
May $148.775 –    $1.100
Aug $152.050 –    $0.275
Sep $151.800 –    $0.375

 

Live Cattle   Oct. 19 Change
Oct $112.250 –   $0.075
Dec $116.775 +  $0.600
Feb ’19 $121.150 +  $0.750
Apr $122.175 +  $0.200
Jun $114.525 –   $0.350
Aug $112.425 –    $0.625
Oct $113.700 –    $0.525
Dec $115.100 –    $0.450
Feb ’20 $116.400 –    $0.475

 

Corn futures Oct. 19 Change
Dec $3.670 –  $0.066
Mar ’19 $3.794 –  $0.062
May $3.870 –  $0.056
Jul $3.926 –  $0.050
Sep $3.944 –  $0.052
Dec $4.000 –  $0.044

 

Oil CME-WTI Oct. 19 Change
Nov $69.12 –    $2.22
Dec $69.28 –    $1.90
Jan ’19 $69.35 –    $1.73
Feb $69.39 –    $1.60
Mar $69.43 –    $1.51
Apr $69.46 –    $1.43

 

Equities

Equity Indexes Oct. 19 Change
Dow Industrial Average  25444.34 +     104.35
NASDAQ     7449.03 –        47.86
S&P 500     2767.78 +         0.65
Dollar (DXY)          95.67 +         0.41
2018-10-21T18:10:32+00:00

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