Calf prices finally began finding some traction later last week with resurgent futures prices and despite sharply lower outside markets.
“The market was active as buyers were feeling better about the market, as the CME Live Cattle contracts posted a healthy rally. More cattle feeders were in the market this week, ready to receive cattle and willing to give more to get these Western North Dakota calves bought,” explained the AMS reporter at Thursday’s Stockmen’s Livestock Exchange in Dickinson, ND. Steer calves there sold $7-$10 higher and heifer peers traded $2-$5 higher.
Nationwide steers and heifers sold from $3/cwt. lower to $2 higher, with limited numbers of yearlings trading steady to $3 higher, according to the Agricultural Marketing Service (AMS).
Winter weather through the Southern Plains reduced auction receipts by 61,000 week to week and direct trade by 16,000.
Feeder Cattle futures closed an average of $6.91 higher week to week on Friday, from $4.57 to $8.57 higher, not counting recently expired spot Oct or newly minted away Oct.
Besides being oversold, Feeder Cattle received support from sharply lower Corn futures, which were pressured by profit taking and the stronger U.S. Dollar, as well as improved growing conditions in Russia and South America. Week to week on Friday, Corn futures closed an average of 14¢ lower through the front six contracts.
The CME Feeder Cattle Index was $2.75 higher week to week on Thursday at $136.76.
Notwithstanding last week’s widespread moisture, David Anderson, Extension livestock economist at Texas A&M University notes drought conditions will likely impact feedlot placements for the remainder of this year.
In the latest issue of In the Cattle Markets, Anderson explains challenges to wheat pasture development, along with drought in the West and in Texas could force increased feedlot placements. At the same time, he says more feeder cattle imports from Mexico add to the supply.
Fed Cattle Prices Tread Water
Negotiated cash fed cattle prices were mainly steady to lower last week, based on data from the Agricultural Marketing Service.
Prices were steady in the Southern Plains at $106/cwt., $2 lower in Nebraska at $103 and steady to $4 lower in the western Corn Belt at $101-$103. Dressed prices the previous week were at $162-$166.
The average five-area direct steer price through Thursday was $104.16/cwt. on a live basis, which was 14¢ more than the previous week, but $7.75 less than the same week last year. The average dressed steer price of $159.70 was $4.27 less than the prior week and $17.89 less than the previous year.
Live Cattle futures closed an average of $3.86 higher week to week on Friday, from $2.62 higher in expiring spot Oct to $4.72 higher.
Total estimated cattle slaughter for the week of 638,000 head was 5,000 head fewer than the previous week and 21,000 head fewer (-3.2%) than the same time last year. Year-to-date estimated total cattle slaughter of 26.7 million head is 1.1 million head fewer (-3.8%) than a year earlier. Beef production of 537.3 million lbs. for the week was 4.1 million lbs. less than the previous week and 4.7 million lbs. less than a year earlier. Year-to-date estimated beef production of 22.2 billion pounds is 256.7 million lbs. less (-1.1%) than a year earlier.
Of regional interest, Andrew P. Griffith, agricultural economist at the University of Tennessee notes the significant increase in fed cattle flowing into Mexico from South Texas.
“Since the first week of July, over 10,000 head of beef cattle for slaughter have been exported to Mexico compared to 134 head for the first 10 months of 2019. These are some of the highest volumes of cattle being shipped to Mexico for slaughter since the early 2000s,” Griffith says, in his weekly market comments. “From a national standpoint, the export of these animals does little to influence the market, but it greatly influences cattle feeders in South Texas where Brahman and Brahman influenced cattle are mainstays.”
The average dressed steer weight for the week ending Oct. 17 was 929 lbs., which was 1 lb. heavier than the prior week and 29 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 4 lbs. heavier than the prior week and 19 lbs. heavier than the previous year.
Choice boxed beef cutout value was 61¢ higher week to week on Friday at $208.10/cwt. Select was 16¢ lower at $191.24.
Given ongoing sluggishness in the wholesale beef market, Griffith explains it’s difficult to tell the level of stability.
“It is also difficult to say boxed beef prices are turning the corner and are going to show consistent week-over-week gains. Seasonally speaking, it is good to be exiting October….this generally marks the time when retailers begin making orders for end of the year holiday events. The issue is that these purchases may be muted relative to previous years since the restaurant and food service industry is practically a no-go zone for many consumers,” Griffith says. “Many businesses have already canceled social celebrations and there is considerable encouragement by health officials to minimize holiday gatherings for families. This will definitely keep beef from moving at the same pace it traditionally does. However, I am sure there will still be consumers who choose to make prime rib the centerpiece of their Christmas meal.”
Friday to Friday Change
Weekly Auction Receipts
| Oct. 30 | Auction | Direct |
Video/net |
Total |
|
187,500 (-61,000) |
11,100 (-16,000) |
2,100 (-34,500) |
200,700 (-111,500) |
CME Feeder Index
| CME Feeder Index* | Oct. 29 | Change |
| $136.76 | + $2.75 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | Oct. 30 | Change |
| 600-700 lbs. | $144.86 | + $0.36 |
| 700-800 lbs. | $139.73 | – $1.38 |
| 800-900 lbs. | $137.96 | – $0.24 |
South Central
| Steers-Cash | Oct. 30 | Change |
| 500-600 lbs. | $140.87 | + $0.17 |
| 600-700 lbs. | $134.93 | + $0.54 |
| 700-800 lbs. | $132.95 | + $1.17 |
Southeast
| Steers-Cash | Oct. 30 | Change |
| 400-500 lbs. | $139.76 | + $0.75 |
| 500-600 lbs. | $126.37 | -0- |
| 600-700 lbs. | $123.51 | + $0.52 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | Oct.30 ($/cwt) | Change |
| Choice | $208.10 | + $0.61 |
| Select | $191.24 | – $0.16 |
| Ch-Se Spread | $16.86 | + $77 |
Futures
| Feeder Cattle | Oct. 30 | Change |
| Nov | $137.400 | + $7.750 |
| Jan ’21 | $134.125 | + $8.575 |
| Mar | $133.525 | + $8.000 |
| Apr | $135.050 | + $7.175 |
| May | $135.750 | + $6.750 |
| Aug | $142.350 | + $5.575 |
| Sep | $142.575 | + $4.575 |
| Oct ’21 | $142.800 | n/a |
| Live Cattle | Oct. 30 | Change |
| Oct | $105.975 | + $2.625 |
| Dec | $108.300 | + $4.725 |
| Feb ’21 | $110.400 | + $3.775 |
| Apr | $113.650 | + $4.375 |
| Jun | $107.875 | + $4.175 |
| Aug | $107.325 | + $4.125 |
| Oct | $110.175 | + $4.075 |
| Dec | $113.475 | + $3.525 |
| Feb ’22 | $116.200 | + $3.375 |
| Corn | Oct. 30 | Change |
| Dec | $3.984 | – $0.208 |
| Mar ’21 | $4.032 | – $0.170 |
| May | $4.060 | – $0.152 |
| Jly | $4.072 | – $0.130 |
| Sep | $3.872 | – $0.112 |
| Oct | $3.872 | – $0.068 |
| Oil CME-WTI | Oct. 30 | Change |
| Dec | $35.79 | – $4.06 |
| Jan ’21 | $36.16 | – $3.99 |
| Feb | $36.57 | – $3.88 |
| Mar | $37.00 | – $3.73 |
| Apr | $37.40 | – $3.57 |
| May | $37.76 | – $3.42 |
Equities
| Equity Indexes | Oct. 30 | Change |
| Dow Industrial Average | 26501.60 | – 1833.97 |
| NASDAQ | 10911.59 | – 636.69 |
| S&P 500 | 3269.96 | – 195.43 |
| Dollar (DXY) | 93.88 | + 1.11 |