Futures and cash cattle prices took a strong step lower last week, pressured by higher grain prices, dwindling forage and stagnant wholesale beef values.
Nationwide, steers and heifers sold $4-$8/cwt. lower, according to the Agricultural Marketing Service (AMS). The CME Feeder Cattle Index was down $6.21 week to week on Thursday, to the lowest level since July.
The AMS reporter on hand for Tuesday’s sale at Miles City Livestock Commission in Montana aptly described the overall market:
“Calves continue to sell out of extremely dry country and are light fleshed and lightweight as a result. CME positions sold off sharply early in the week and buyers adjusted prices to fit lower breakevens reflective of lower Live Cattle contracts. This coupled with higher grain prices created sharply lower prices this week. Calves preconditioned with two rounds sold with the best demand and sold with an $8.00-10.00 premium over calves with only spring vaccinations.”
Week to week on Friday, Corn futures closed an average of 14¢ higher through the front four contracts (Dec-Jly ’21). Those same contracts increased an average of 30¢ in the last three weeks.
Week to week on Friday, Soybean futures closed an average of 28¢ higher through the front six contracts.
Feeder Cattle futures closed an average of $3.24 lower week to week on Friday, from $1.72 lower at the back to $5.37 lower toward the front.
Feedlot Placements Up 6%
Feedlot placements in September of 2.23 million head were 124,000 head more (+5.9%) than the same time last year, according to the monthly Cattle on Feed report issued Friday. That was about 3% more than expectations ahead of the report.
Keep in mind the report accounts for feedlots with 1,000 head or more capacity.
Placements of 2.23 million head in September were 124,000 head more (+5.9%) than the same time last year. That was about 3% more than expectations ahead of the report. In terms of weights 36% went on feed weighing 699 lbs. or less, 46% weighing 700-899 lbs. and 18% weighing 900 lbs. or more.
Marketings of 1.85 million head in September were 108,000 head more (+6.2%) year over year, a touch more positive than expectations.
Cattle on feed Oct. 1 of 11.72 million head were 429,000 head more (+3.8%) than the previous year. That’s the most for the date since the data series began in 1996 and a little more than what the trade anticipated.
Fed Cattle Prices Drift Lower
For the week, negotiated cash fed cattle prices were $2 lower on a live basis in the Southern Plains at $106/cwt.; $3-$4 lower in Nebraska at $104-$105 and $2 lower in the western Corn Belt at $103-$105. Dressed prices were $4-$7 lower in Nebraska at $162-$165 and $3-$4 lower in the western Corn Belt at $163-$165.
Through Thursday, the five-area direct weighted average steer price was $105.11/cwt. on a live basis, which was $2.50 less than the same period last week and $4.74 less than a year earlier. The average dressed steer price of $163.97 was $4.43 less than the previous week and $10.91 less than last year.
Live Cattle futures closed an average of $3.31 lower week to week on Friday ($1.45 lower at the back to $5.05 lower toward the front).
“Finished cattle prices took a hit this week with no apparent driver for the price decline. All that can be said is that October Live Cattle futures declined more than $3/cwt. on Monday and then floundered at that level the rest of the week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
“Maybe the price decline on the futures market, which was followed by cash trade, was due to expectations associated with the monthly Cattle on Feed report. It is sometimes difficult to know what is driving prices one way or the other, because many of the changes in prices are based on expectations and incomplete information. Information is constantly flowing and futures traders and those buying and selling cattle are evaluating this information in real time, which influences how they value animals.”
Total cattle slaughter the week ending Oct. 10 was 637,073 head, according to USDA’s Actual Slaughter Under Federal Inspection report. That was 26,074 head fewer (-4.02%) than the previous week and 11,205 head fewer (-1.73%) than the previous year. Total fed cattle slaughter of 502,345 head was 22,199 head fewer than the prior week (-4.23%) and 7,117 head fewer (-1.40%)than the same week last year.
The average dressed steer weight for that week of 928 lbs. was 4 lbs. more than the previous week and 27 lbs. more than the prior year. The average dressed heifer weight of 846 lbs. was 3 lbs. more than the previous week and 18 lbs. more than a year earlier.
Wholesale Beef Values Drag
Choice boxed beef cutout value was $2.54 lower week to week on Friday at $207.49/cwt. Select was $2.12 lower at $191.40.
Griffith points out commercial beef production through the first nine months of the year was just 60 million pounds less year over year (-0.3%).
“The quantity of beef in cold storage is an indicator that beef continues to move rapidly and that consumers continue to demand beef,” Griffith says.
The 461.99 million lbs. of beef in cold storage Sept. 30, was 3% more than the previous month but 6.99 million lbs. less (-1.5%) than the same time last year, according to USDA’s latest Cold Storage report.
Frozen pork supplies were up slightly from the previous month but down 22% from last year.
Total red meat supplies in freezers were up 1% from the previous month but down 13% from last year.
Total frozen poultry supplies were down 2% from the previous month and down 3% from a year ago.
“The latest beef export data further supports the demand statement in that U.S. beef and veal exports have recovered nicely from the pandemic with August 2020 export quantities exceeding year-ago levels,” according to Griffith. “Another supporter of beef movement could be the international pull for pork as China continues to demand large quantities of pork, as they continue their recovery from African Swine Fever.”
Friday to Friday Change
Weekly Auction Receipts
| Oct. 23 | Auction | Direct |
Video/net |
Total |
|
248,500 (+15,500) |
27,100 (+11,800) |
26,000 (+18,200) |
312,200 (+44,600) |
CME Feeder Index
| CME Feeder Index* | Oct. 22 | Change |
| $134.01 | – $6.21 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Oct. 23 | Change |
| 600-700 lbs. | $144.50 | – $7.23 |
| 700-800 lbs. | $141.11 | – $4.09 |
| 800-900 lbs. | $138.20 | – $4.79 |
South Central
| Steers-Cash | Oct. 23 | Change |
| 500-600 lbs. | $140.70 | – $3.37 |
| 600-700 lbs. | $134.39 | – $4.71 |
| 700-800 lbs. | $131.78 | – $7.23 |
Southeast
| Steers-Cash | Oct. 23 | Change |
| 400-500 lbs. | $139.01 | – $6.12 |
| 500-600 lbs. | $126.37 | – $8.23 |
| 600-700 lbs. | $122.99 | – $8.45 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Oct. 23 ($/cwt) | Change |
| Choice | $207.49 | – $2.54 |
| Select | $191.40 | – $2.12 |
| Ch-Se Spread | $16.09 | – $0.42 |
Futures
| Feeder Cattle | Oct. 23 | Change |
| Oct | $133.525 | – $4.575 |
| Nov | $129.650 | – $5.375 |
| Jan ’21 | $125.550 | – $3.775 |
| Mar | $125.525 | – $3.325 |
| Apr | $127.875 | – $2.875 |
| May | $129.000 | – $2.375 |
| Aug | $136.775 | – $1.925 |
| Sep | $138.000 | – $1.725 |
| Live Cattle | Oct. 23 | Change |
| Oct | $103.350 | – $3.800 |
| Dec | $103.575 | – $5.050 |
| Feb ’21 | $106.625 | – $4.850 |
| Apr | $109.275 | – $4.325 |
| Jun | $103.700 | – $3.550 |
| Aug | $103.200 | – $2.775 |
| Oct | $106.100 | – $2.200 |
| Dec | $109.950 | – $1.775 |
| Feb ’22 | $112.825 | – $1.450 |
| Corn | Oct. 23 | Change |
| Dec | $4.192 | + $0.172 |
| Mar ’21 | $4.202 | + $0.132 |
| May | $4.212 | + $0.128 |
| Jly | $4.202 | + $0.116 |
| Sep | $3.984 | + $0.034 |
| Oct | $3.940 | + $0.016 |
| Oil CME-WTI | Oct. 23 | Change |
| Dec | $39.85 | – $1.27 |
| Jan ’21 | $40.15 | – $1.27 |
| Feb | $40.45 | – $1.25 |
| Mar | $40.73 | – $1.22 |
| Apr | $40.97 | – $1.20 |
| May | $41.18 | – $1.19 |
Equities
| Equity Indexes | Oct. 23 | Change |
| Dow Industrial Average | 28335.57 | – 270.74 |
| NASDAQ | 11548.28 | – 123.37 |
| S&P 500 | 3465.39 | – 18.42 |
| Dollar (DXY) | 92.75 | – 0.97 |