Weekly Market Highlights

Weekly Market Highlights 2017-06-02T12:10:16-06:00

Weekly Market Highlights

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Cattle Current Weekly Highlights—Week ending Jan. 15, 2021

Judging by auction reports throughout the week, calves and feeder cattle prices were pressured significantly, overall, by surging grain prices, weaker cash fed cattle prices and volatile Cattle futures. Dangerously high winds in the Dakotas also weighed on receipts and demand at some sales in that region.

The exception to weaker prices was in the Southeast, where states reporting on Friday (Alabama, Florida, Georgia and Mississippi), indicated feeder classes sold generally steady to $1-$5 higher.

The Agricultural Marketing Service will issue its summary from last week on Tuesday.

Week to week on Friday, Feeder Cattle futures closed an average of 72¢ lower through the front five contracts (20¢ to $1.25 lower) and then an average of $1.26 higher. That was with a bounce of an average of $2.02 higher on Friday.

“Since Christmas, January Feeder Cattle futures prices declined $8/cwt. Similarly, March Feeder Cattle futures contract prices are approximately $9 lower, while the August contract has only lost $5 over the same time period,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Soybeans and Corn Climb Higher

Plenty of the aforementioned price pressure stems from the extraordinary and relentless increase in grain prices.

Week to week on Friday, Corn futures closed an average of 30¢ higher through the front six contracts.

“Corn futures prices increased more than $1/bu. since the middle of December,” Griffith says. “If it is assumed that an animal will consume 50 bu. of corn while in the feedlot, then the $1 increase in price means it will cost $50 more in feed costs. That increase would essentially mean that a cattle feeder has to pay $6/cwt. less for an 800-pound steer, if everything else remains the same.”

That’s before considering corn basis, which appears to be strengthening, Griffith explains.

“The Corn futures rally is following soybeans higher, and cash has struggled to keep pace, widening the basis for this time of year. Although exports have been strong, the fundamentals are not currently holding ending stocks tight enough to justify $5 corn,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “Still, there seems little to move the futures lower ahead of U.S. plantings and harvest in South America.”

USDA increased the forecast season-average corn price received by producers to $4.20/bu., in the latest monthly World Agricultural Supply and Demand Estimates. That was 20¢more than the previous month, based on lower production and ending stocks.

Week to week on Friday, Soybean futures closed an average of 41¢ higher through the front six contracts. That’s right at an average of $1 higher for those contracts over the last two weeks.

USDA forecast the U.S. season-average soybean price for 2020-21 60¢ higher at $11.15/bu. The soybean meal price was projected $20 higher at $390/short ton. The soybean oil price was forecast 2.5¢ higher at 38.5¢/lb. As with corn, lower estimated production and ending stocks contributed to the increase. 

“The impetus for surging prices (soybeans) has come from adverse crop development conditions in Argentina, the third largest soybean producing country and the leading exporter of soybean meal in the world,” LMIC analysts explain. “Reduced availability of soybeans and soybean products from Argentina is forcing the world to focus on U.S. soybean supplies. Projected exports of U.S. soybeans is expected to be a record at 2.2 billion bu. and soybean meal exports should be close to the record set last year at 14 million tons. As a result, inventories of soybeans at the end of this crop year (Aug. 31, 2021) will be close to 200-220 million bu., down from 909 million bu. two years earlier. 

“Tightening supplies support a rising price trend in order to bid more plantings of the crop in the U.S. this spring versus corn and cotton. The average price for soybeans this crop year is currently expected to be $11.50 but the risks to this forecast are all to the high side, depending on weather and the global economy in coming months. The potential for record high soybean prices in the $15-$20 area exists, based on possible market conditions.”

Fed Cattle Prices Soften

Despite the nascent and slow rebound in wholesale beef values, negotiated cash fed cattle prices struggled last week: generally $1-$3 lower at $108-$111/cwt., according to the Agricultural Marketing Service. Dressed prices were $1-$4 lower at $172-$174.

More specifically, live prices last week were at $112/cwt. in the Southern Plains and Colorado, $110-$111 in Nebraska and $110 in the western Corn Belt. Dressed trade was at $172 in Nebraska and at $173-$174 in the western Corn Belt.

Through Thursday, the average five-area direct fed steer price was $109.52/cwt. on a live basis, which was $1.96 less than the previous week and $14.48 less than the same week a year earlier. The average steer price in the beef was $173.06, which was $2.96 less than the previous week and $26.01 less than a year earlier.

Week to week on Friday, except for an average of $1.40 lower in the front two contracts, Live Cattle futures closed an average of $2.33 higher.

Choice boxed beef cutout value was $6.12 higher at $212.92/cwt. week to week on Friday. Select was $6.36 higher at $203.08.

Griffith notes the rib and loin primal are driving the stronger beef market with both more than $11/cwt. higher week to week.

“The chuck and short plate are also providing some support for the higher price as the chuck is nearly $7 higher than last week and short plate values have increased more than $5,” Griffith says.

Looking further ahead, USDA lowered its 2021 forecast for total red meat and poultry production, compared to the previous month’s estimate, in the latest WASDE.

Even so, total estimated red meat and poultry production for 2021 is forecast 634 million lbs. more than in 2020 (+0.60%) at 107.10 billion lbs.

Beef production for 2021 is forecast at 27.19 billion lbs., which would be 32 million lbs. more (+0.11%) than in 2020, with higher non-fed cattle slaughter more than offsetting lighter expected cattle carcass weights.

WASDE estimated the average five-area direct fed steer price for last year at $108.51/cwt. Fed steer prices for 2021 are projected to be $113 in the first and second quarters, $115 in the third quarter and $120 in the fourth quarter for an annual average of $115.50, which was 50¢ more than the previous month’s forecast.

Friday to Friday Change

Weekly Auction Receipts

Most recent week available.

Jan. 9 Auction Direct

Video/net

Total
 

349,800

(+112,600)

40,300

(-1,700)

87,300

(+60,600)

477,400

(+171,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 15 Change
  $135.45 –   0.18

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Most recent week available.

North Central

Steers-Cash Jan. 8 Change
600-700 lbs. $151.54 +  $4.76
700-800 lbs. $141.00 +  $4.19
800-900 lbs. $134.78 +  $2.30

South Central

Steers-Cash Jan. 8 Change
500-600 lbs. $157.32 + $0.06
600-700 lbs. $142.31 –  $2.48
700-800 lbs. $134.55 –  $3.08

Southeast

Steers-Cash Jan. 8 Change
400-500 lbs. $151.95 –  $1.38
500-600 lbs. $142.66 + $1.94
600-700 lbs. $131.91 + $2.96

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 15 ($/cwt) Change
Choice $212.92 + $6.12
Select $203.08 + $6.36
Ch-Se Spread $9.84 –  $0.27

 

Futures

Feeder Cattle  Jan. 15 Change
Jan  $134.575 –  $1.250
Mar $135.825 –  $1.000
Apr $138.300 –  $0.775
May $140.250 –  $0.375
Aug $147.500 –  $0.200
Sep $149.350 + $0.850
Oct  $150.250 + $1.225
Nov $150.475 + $1.725

 

Live Cattle   Jan. 15 Change
Feb $112.775 –  $1.700
Apr $118.200 –  $1.100
Jun $116.275 + $1.000
Aug $117.025 + $2.200
Oct $120.825 + $2.400
Dec $123.475 + $2.775
Feb ’22 $124.750 + $2.550
Apr $125.750 + $2.750
Jun $121.375 + $3.625

 

Corn  Jan. 15 Change
Mar ’21 $5.314 + $0.352
May $5.346 + $0.372
Jly $5.320 + $0.374
Sep $4.854 + $0.290
Oct $4.600 + $0.196
Mar ’22 $4.654 + $0.198

 

Oil CME-WTI Jan. 15 Change
Feb $52.36 + $0.12
Mar $52.42 + $0.16
Apr $52.36 + $0.17
May $52.23 + $0.19
Jun $52.04 + $0.22
Jly $51.82 + $0.28

 

Equities

Equity Indexes Jan. 15 Change
Dow Industrial Average  30814.26 –    283.71
NASDAQ  12998.50 –    204.37
S&P 500   3768.25 –      56.43
Dollar (DXY)       90.78 +       0.71
January 17th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 8, 2021

Cattle markets were mixed and tenuous last week amid plenty of uncertainty: everything from the potential demand impact of continually rising COVID-19 cases to the relentless rise in feed costs.

Judging by the weekly auction sales monitored by Cattle Current, the turn of the calendar and mostly conducive weather, prompted heavy market volume last week. Where week-to-week trends were available, prices were steady to mixed across a wide range.

“Demand was reported as good throughout the nation the first full marketing week of 2021. The first full week of the year is typically the largest volume week of the year and this year was no exception with a heavy supply of cattle covering the entire weight spectrum,” AMS analysts explain. “Lightweight grazing type calves with many more days left before heading to a feedyard found the best demand as there is a lot more time for them to offer opportunities for profit.”

With the new year, AMS switched to releasing weekly calf and feeder cattle market summary data from Friday of each week to Monday, in order to have a more comprehensive weekly snapshot.

“Regardless of the physical marketings, most years start with optimism, but that has not been reflected in the Feeder Cattle futures market the first week of the year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “In actuality, Feeder Cattle futures began to slip following the Christmas holiday and that slide continued into the first week of 2021.”

That has plenty to do with surging grain prices, tied to tighter global supplies, dry conditions in South America, speculation about a La Niña drought in North America this spring and strong export demand, supported by the weak U.S. dollar.

Week to week on Friday, compared to the previous Thursday, Corn futures closed an average of 14¢ higher through the front three contracts; an average of 49¢ higher in those contracts over the last two weeks. 

Soybean futures closed an average of 60¢ higher through the front six contracts. That’s an average of about $1 higher for those contracts over the last two weeks.

Week to week, Feeder Cattle futures closed an average of $2.19 lower (35¢ to $3.40 lower) except for an average of 75¢ higher in the back two contracts. 

“January Feeder Cattle futures prices have declined about $5/cwt. since Christmas with most of the other contract months following its lead,” Griffith says. “This decline definitely put a damper on local cattle prices this week. Those that will be impacted the most are producers who waited until the new year to market cattle…As of right now, there appears to be more pressure on the cattle market than information to support higher prices, but odder things have happened. Prices in 2021 are expected to exceed prices in 2020 for most classes of cattle.”

“Cattle production will be affected by higher feed prices, not so much in terms of how much production will occur, but more in terms of how production will change,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in is weekly market comments. “For example, higher ration costs will change feedlot demand for the type and size of feeder cattle preferred in feedlots.”

Fed Cattle Prices Steady to Higher

Despite early hopes and fundamentals suggesting higher negotiated cash fed cattle prices, they ended the week generally unevenly steady.

Live prices were steady in the Southern Plains at $112/cwt., steady to $1 lower in Nebraska at $110-$111, steady to $1 higher in Colorado at $112 and steady to $2 lower in the western Corn Belt at $110. Dressed prices were steady to $1 higher at $176 in Nebraska and at $175-$177 in the western Corn Belt, according to AMS.

Through Thursday, the average five-area direct fed steer price was 1¢higher on a live basis at $111.49/cwt. The average steer price in the beef was 47¢ higher at $176.02.

Estimated cattle slaughter of 651,000 head for the week ending Jan. 9 was 136,000 head more than the previous holiday week. Estimated beef production of 544.9 million lbs. was 15.4 million lbs. more (+2.9%) than the same week a year earlier.

Week to week on Friday, compared to the previous Thursday, Live Cattle futures closed an average of 50¢ higher except for 55¢ lower in spot Feb and $5.57 lower in recently minted away-Jun. 

“Given that prices held steady in the South and were $1 higher in the North bodes well for an increasing market. The key to a strengthening market is probably in beef consumers’ hands,” Griffith says.

“Choice Boxed-beef values continue to see some erosion, trading near their lows as January is not noted as a consumer beef month, with loins and ribs down considerably since the holidays,” say AMS analysts.

Choice boxed beef cutout value was $3.15 lower at $206.80/cwt. week to week on Friday, compared to the previous Thursday. Select was $1.04 higher at $196.69.

The average dressed steer weight the week ending Dec. 25 was 913 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 8 lbs. less than the previous week but 8 lbs. heavier than the same week a year earlier. The average dressed heifer weight of 839 lbs. was 8 lbs. less than the previous week but 2 lbs. heavier than the prior year.

“Strong beef demand and tightening cattle supplies provide cautious optimism for cattle markets in 2021,” Peel says. “Higher feed prices and continuing drought conditions are threats to individual producers and perhaps to overall market conditions in the coming year. Consumer demand will be supported by additional federal stimulus for a time but continuing macroeconomic challenges will persist through the year. The continuing pandemic and the time needed for vaccine implementation suggest that much of the promise of 2021 may be pushed into the second half of the year. In the meantime, uncertainty and volatility are likely to remain elevated and risk management continues to be a key management and marketing consideration.”

Friday to Friday Change

Weekly Auction Receipts

Compared to Dec. 18, the most recent previous week available…

Jan. 9 Auction Direct

Video/net

Total
 

349,800

(+112,600)

40,300

(-1,700)

87,300

(+60,600)

477,400

(+171,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 7 Change
  $135.63 –   3.14

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 8 Change
600-700 lbs. $151.54 +  $4.76
700-800 lbs. $141.00 +  $4.19
800-900 lbs. $134.78 +  $2.30

South Central

Steers-Cash Jan. 8 Change
500-600 lbs. $157.32 + $0.06
600-700 lbs. $142.31 –  $2.48
700-800 lbs. $134.55 –  $3.08

Southeast

Steers-Cash Jan. 8 Change
400-500 lbs. $151.95 –  $1.38
500-600 lbs. $142.66 + $1.94
600-700 lbs. $131.91 + $2.96

*most recent previous week available.

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Prior Thursday through Friday…

Boxed Beef  (p.m.) Jan. 8 ($/cwt) Change
Choice $206.80 –  $3.15
Select $196.69 + $1.04
Ch-Se Spread $10.11 –  $4.19

 

Futures

Prior Thursday through Friday…

Feeder Cattle  Jan. 8 Change
Jan  $135.825 –  $3.125
Mar $136.825 –  $3.400
Apr $139.075 –  $2.700
May $140.625 –  $2.225
Aug $147.700 –  $1.325
Sep $148.500 –  $0.350
Oct  $149.025 + $0.750
Nov $148.750 + $0.750

 

Prior Thursday through Friday…

Live Cattle   Jan. 8 Change
Feb $114.475 –  $0.550
Apr $119.300 + $0.050
Jun $115.275 + $0.575
Aug $114.825 + $0.400
Oct $118.425 + $0.825
Dec $120.700 + $0.650
Feb ’22 $122.200 + $0.525
Apr $123.000 + $0.500
Jun $117.750 –  $5.575

 

Prior Thursday through Friday…

Corn  Jan. 8 Change
Mar ’21 $4.962 + $0.122
May $4.974 + $0.142
Jly $4.946 + $0144
Sep $4.564 + $0.100
Oct $4.404 + $0.058
Mar ’22 $4.456 + $0.054

 

Prior Thursday through Friday…

Oil CME-WTI Jan. 8 Change
Feb $52.24 + $3.72
Mar $52.26 + $3.63
Apr $52.19 + $3.50
May $52.04 + $3.35
Jun $51.82 + $3.19
Jly $51.54 + $3.02

 

Equities

Prior Thursday through Friday…

Equity Indexes Jan. 8 Change
Dow Industrial Average  31097.97 +  491.49
NASDAQ  13201.97 +   313.69
S&P 500   3824.68 +     68.61
Dollar (DXY)       90.07 +       0.13
January 11th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 31, 2020

Editor’s note: Due to the holiday, there was no weekly regional price or summary auction data from the Agricultural Marketing Service last week. Come January, AMS will begin releasing weekly data on Monday rather than Friday. Cattle Current will adjust accordingly.

Except for the relentless surge in grain futures prices, cattle markets ended mainly steady to higher last week. That’s keeping in mind that the second consecutive holiday-shortened week made for tenuous trends.

Negotiated cash fed cattle prices for the week were generally steady to mostly $2 higher on a live basis through Thursday afternoon, according to the Agricultural Marketing Service: $112/cwt. in the Southern Plains, mostly $112 in Nebraska, mostly $111 with a few up to $112 in Colorado. They were steady to $6 higher week to week in the western Corn Belt at $110-$112. Dressed trade was $3-$4 higher at $175-$176.

From the previous Wednesday through Thursday last week, Live Cattle futures closed an average of 68¢ higher, supported by stronger fundamentals heading into 2021.

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University expects beef cow numbers at the beginning of 2021 to range from unchanged to 1% less year over year. If so, he explains it would continue the slow tightening of beef cattle numbers and beef production in 2021.

“Total 2021 cattle slaughter is forecast to be down about 1%, leading to a year-over-year decrease in beef production of 1% to 2%,” Peel says, in his weekly market comments. “Herd dynamics in 2021 could affect these forecasts. If herd liquidation should accelerate, the short-term impacts would be an increase in cattle slaughter due to more heifers and cows in the slaughter totals. Conversely, should the industry move to expand cattle inventories, cattle slaughter would be reduced with fewer heifers in feedlots and fewer cows culled. There is potential for either scenario. The cattle inventory trajectory in 2021 will depend on numerous factors including control of the pandemic, U.S. macroeconomic conditions, global protein markets, drought conditions, and feed prices, among others.”

More immediately, wholesale beef values continued to suggest the seasonal bottom was established.  

Choice boxed beef cutout value was $2.41 higher on Thursday, compared to the previous Wednesday at $209.95/cwt. Select was $2.28 lower at $195.65.

Grain Prices Surge Higher

Calf and feeder cattle trade was sparse again last week; no trends reported by AMS through Thursday afternoon.

From the previous Wednesday through Thursday last week, Feeder Cattle futures closed an average of $1.85 lower, pressured by climbing grain futures, tied to iffy international production and strong exports.  

From the previous Wednesday through Thursday last week, Corn futures closed an average of 35¢ higher through the front three contracts; an average of 14¢ higher through the next three.  

During the same period, Soybean futures closed an average of 45¢ higher through the front six contracts.

Friday to Friday Change

Weekly Auction Receipts

Two weeks earlier…

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

CME Feeder Index

Wednesday through Wednesday…

CME Feeder Index* Dec. 30 Change
  $138.77 –   1.05

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Two weeks earlier…

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

Two weeks earlier…

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

Two weeks earlier…

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Wednesday through Thursday…

Boxed Beef  (p.m.) Dec. 31 ($/cwt) Change
Choice $209.95 + $2.41
Select $195.65 –  $2.28
Ch-Se Spread $14.30 + $4.68

 

Futures

Wednesday through Thursday…

Feeder Cattle  Dec. 31 Change
Jan ’21 $138.950 –  $1.325
Mar $140.225 –  $1.725
Apr $141.775 –  $1.975
May $142.850 –  $2.375
Aug $149.025 –  $1.975
Sep $148.850 –  $1.600
Oct ’21 $148.275 –  $1.725
Nov $148.000 –  $2.100

 

Wednesday through Thursday…

Live Cattle   Dec. 31 Change
Dec $112.950 + $1.025
Feb ’21 $115.025 + $0.300
Apr $119.250 + $0.550
Jun $114.700 + $0.400
Aug $114.425 + $0.700
Oct $117.600 + $0.850
Dec $120.050 + $0.750
Feb ’22 $121.675 + $0.925
Apr $122.500 + $0.625

 

Wednesday through Thursday…

Corn  Dec. 31 Change
Mar ’21 $4.840 + $0.368
May $4.832 + $0.350
Jly $4.802 + $0.326
Sep $4.464 + $0.178
Oct $4.346 + $0.114
Mar ’22 $4.402 + $0.128

 

Wednesday through Thursday…

Oil CME-WTI Dec. 31 Change
Feb $48.52 + $0.40
Mar $48.63 + $0.39
Apr $48.69 + $0.36
May $48.69 + $0.32
Jun $48.63 + $0.29
Jly $48.52 + $0.26

 

Equities

Wednesday through Thursday…

Equity Indexes Dec. 31 Change
Dow Industrial Average  30606.48 +  476.65
NASDAQ  12888.28 +   117.17
S&P 500   3756.07 +     66.06
Dollar (DXY)       89.92 –        0.40
January 1st, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 25, 2020

Editor’s note: Due to the holiday, there was no weekly regional price or summary auction data from the Agricultural Marketing Service last week. Come January, AMS will begin releasing weekly data on Monday rather than Friday. Cattle Current will adjust accordingly.

Given the Christmas holiday, calf and feeder cattle trade was sparse last week, so there were no trends. A week earlier, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS).

“Prices for calves should begin to gain traction moving into the first quarter of 2021. There is also optimism for the yearling cattle market in 2021,” said Andrew P. Griffith, agricultural economist at the University of Tennessee, in his Dec. 18 weekly market comments.

Feeder Cattle futures closed an average of 46¢ higher week to week on Thursday (previous Friday through Thursday), except for 10¢ lower in Aug. That was in the face of continued strengthening in grain prices.

For instance, Corn futures closed an average of 9¢ higher week to week on Thursday (previous Friday through Thursday) through the front six contracts. Soybean futures closed an average of 42¢ higher.

Fed Cattle Prices Strengthen

Expectations for firmer to higher wholesale beef values helped underpin market support last week.

Choice boxed beef cutout value was $1.09 lower on Wednesday; compared to the previous Friday at $207.54/cwt. Select was $3.66 higher at $197.93.

Negotiated cash fed cattle was not reported Thursday or Friday. On Wednesday, prices were $2 higher in the Southern Plains at $110/cwt., according to the Agricultural Marketing Service. There were some early dressed sales in Nebraska and the western Corn Belt at $172; a few live sales in the western Corn Belt at $110. Trade in those regions the previous week was at mostly $105 on a live basis and mostly $165 in the beef.

Live Cattle futures closed an average of 71¢ higher week to week on Thursday (previous Friday through Thursday), from 12¢ higher to $1.67 higher in spot Dec.

Higher aforementioned feed costs lowered projected feedlot returns for the majority of the next nine months, in the latest Historical and Projected Kansas Feedlot Net Returns from Kansas State University (KSU).

Keep in mind that the following projections assume no price risk management.

From December through August of next year, KSU projected positive returns, ranging from an estimated +$14.99 per head in December to +$91.11 in May, with estimated feedlot cost of gain (FCOG) ranging from $84.67/cwt. (Dec.) to $91.11 in May.

Conversely, KSU projects losses in five of those nine months, ranging from -$6.28 per head in August to -$47.92 in July, with FCOG in those months ranging from $86.14/cwt. in January to $92.38 in April.

At the same time, feedlot flows should stabilize going forward, compared to the volatility spawned by pandemic disruptions seen for much of the year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University.

For instance, in his weekly market comments, Peel explained, “Monthly feedlot placements varied from 23% lower year over year in March to 11% higher in July, to 11% lower in October.” For January through November, he says total placements were 4.4% less year over year, but were 0.5% more than last year for the last six months.

“Placements below a year ago in October and November helped greatly reduce inventories on feed. October placements were down by more than 10%, and November settled in at 9% below 2019,” say analysts with the Livestock Marketing Information Center (LMIC), reflecting on last week’s monthly Cattle on Feed report.

“From a placement perspective, December auction volumes of feeder cattle receipts appear to have increased from December of last year, but border crossings of feeder cattle from Mexico continue to be below a year ago,” LMIC analysts explain, in the latest Livestock Monitor. “The five-year average indicates December placements drop about 15% from November levels. Given November’s already low placements, expect December 2020 placements to have a restrained seasonal move compared to the five-year average.”

“With herd inventories continuing to drift lower, total cattle numbers should be generally supportive of cattle prices in 2021,” Peel says.

Friday to Friday Change

Weekly Auction Receipts

Prior week…

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

CME Feeder Index

Thursday through Wednesday…

CME Feeder Index* Dec. 23 Change
  $139.82 +  $0.26

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Prior week…

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

 

Prior week…

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

 

Prior week…

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Friday through Wednesday…

Boxed Beef  (p.m.) Dec. 23 ($/cwt) Change
Choice $207.54 –  $1.09
Select $197.93 + $3.66
Ch-Se Spread $9.62 –  $4.74

 

Futures

Friday through Thursday…

Feeder Cattle  Dec. 24 Change
Jan ’21 $140.925 + $0.475
Mar $142.325 + $0.025
Apr $143.925 + $0.025
May $145.225 + $0.450
Aug $150.000 –  $0.100
Sep $150.475 + $0.575
Oct ’21 $150.025 + $0.475
Nov $149.700 + $1.200

 

Friday through Thursday…

Live Cattle   Dec. 24 Change
Dec $112.150 + $1.675
Feb ’21 $114.975 + $0.125
Apr $118.975 + $0.325
Jun $114.475 + $0.400
Aug $113.925 + $0.450
Oct $116.975 + $0.700
Dec $119.475 + $0.925
Feb ’22 $120.925 + $0.825
Apr $121.800 + $0.925

 

Friday through Thursday…

Corn  Dec. 24 Change
Mar ’21 $4.510 + $0.136
May $4.516 + $0.124
Jly $4.502 + $0.106
Sep $4.300 + $0.070
Oct $4.244 + $0.060
Mar ’22 $4.286 + $0.052

 

Friday through Thursday…

Oil CME-WTI Dec. 24 Change
Feb $48.23 –  $1.01
Mar $48.35 –  $0.99
Apr $48.43 –  $0.97
May $48.45 –  $0.95
Jun $48.43 –  $0.90
Jly $48.34 –  $0.87

 

Equities

Friday through Thursday…

Equity Indexes Dec. 24 Change
Dow Industrial Average  30199.87 +  20.82
NASDAQ  12804.73 +  49.09
S&P 500   3703.06 –      6.35
Dollar (DXY)       90.22 +     0.20
December 27th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 18, 2020

Warily higher Cattle futures prices, the prospect for stronger fundamentals next year and last-minute marketing for the season lent support to calf and feeder cattle prices last week.

Nationwide, steers and heifers sold steady to $3 higher, according to the Agricultural Marketing Service (AMS). However, the late-week storm pressured buyer demand in some areas.

“A strong winter storm bringing as much as 11 plus inches of snow to Oklahoma and the East coast has many—mostly wheat producers—weary of health issues,” explained the AMS reporter at Thursday’s Superior Livestock Video Auction. “Demand was moderate to good for feeder cattle; mostly light to moderate for calves as producers in wheat country are currently turning cattle out or looking to do so if health issues are in check.”

Feeder Cattle futures closed an average of $1.76 higher week to week on Friday, from 72¢ higher in spot Jan to $2.35 higher.

“Calf and feeder cattle prices are definitely not at their peak right now, but they also are not terrible. Prices for calves should begin to gain traction moving into the first quarter of 2021. There is also optimism for the yearling cattle market in 2021,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

In the meantime, analysts with USDA’s Economic Research Service (ERS) point out feeder steer prices (750-800 lbs.) in November were $8 less year over year at $138.22/cwt.

“The first prices reported in December were almost $13 below the same week last year at $136.67,” ERS analysts say, in the latest Livestock, Dairy and Poultry Outlook.

Even so, ERS left the projected fourth-quarter feeder steer price unchanged at $137. Forecast prices (basis Oklahoma City) for next year were also unchanged: $133 in the first quarter, $136 in the second quarter, $141 in the third quarter and $138 for the annual average.

Iffy weather in other parts of  the world, the grain port strike in Argentina, the lower U.S. dollar and strong exports continue to support grain prices.

U.S. net corn export sales for the week ending Dec. 10 were 41% more than the previous week (2020-21 market year) and 40% more than the prior four-week average, according to USDA’s weekly U.S. Export Sales report.

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

Net U.S. soybean export sales were 62% more than the previous week and 20% more than the prior four-week average.

Week to week on Friday, Soybean futures closed an average of 51¢ higher through the front six contracts.

Feedlot Placements Down Near 9%

Markets will likely view Friday’s monthly Cattle on Feed report as at least neutral, with slightly fewer November placements and slightly more marketings than expected.

Placements in November of 1.91 million head were 187,000 head fewer (-8.9%) than the prior year, compared to average expectations of 8.2% less, according to the Urner Barry Survey shared by the Daily Livestock Report.

Marketings in November of 1.78 million head were 31,000 head fewer (-1.7%); pre-report expectations were for a decline of 2.1%.

Total cattle on feed in yards with 1,000 or more capacity, as of Dec. 1, were 12.04 million head, just 5,000 head more (+0.04%) than the previous year. Expectations ahead of the report were for no change.

Fed Cattle Prices Waver

Negotiated cash fed cattle prices ended steady in the Southern Plains last week at $108/cwt., but lower in the North. Live prices were $1-$2 lower in Nebraska at $105 and $1 lower in the western Corn Belt at $105. Dressed trade was $3 lower at $165.

Live Cattle futures closed an average of $1.28 higher week to week on Friday, from 85¢ to $1.72 higher in spot Dec. 

Although it appears the backlog of fed cattle created by pandemic disruptions is past, mostly mild weather until recently continues to buoy feedlot cattle performance.

The average dressed steer weight the week ending Dec. 5 was 922 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week and 16 lbs. heavier than the prior year. The average dressed heifer weight of 850 lbs. was the same as a week earlier but 10 lbs. heavier than the previous year.

ERS projected the average fourth-quarter, five-area direct fed steer price $1 lower at $108. However, they forecast next year’s average price $1 higher at $115.

Specifically, fed steer prices are forecast to be $113 in the first and second quarters and $114 in the third quarter.

Wholesale beef values continued their seasonal slide last week but showed signs of nearing the bottom. Choice boxed beef cutout value was $5.25 lower week to week on Friday at $208.63/cwt. Select was $1.44 lower at $194.27.

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 18 Auction Direct

Video/net

Total
 

237,200

(-117,500)

42,000

(+15,000)

26,700

(+18,200)

305,900

(-84,300)

 

 

CME Feeder Index

CME Feeder Index* Dec. 17 Change
  $138.48 +  $1.82

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.18 Change
600-700 lbs. $155.50 +  $4.76
700-800 lbs. $145.61 +  $4.19
800-900 lbs. $138.99 +  $2.30

 

South Central

Steers-Cash Dec. 18 Change
500-600 lbs. $157.26 + $1.32
600-700 lbs. $144.79 + $3.10
700-800 lbs. $137.63 + $1.96

 

Southeast

Steers-Cash Dec. 18 Change
400-500 lbs. $154.44 –  $1.11
500-600 lbs. $139.60 + $1.12
600-700 lbs. $128.67 + $0.28

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 18 ($/cwt) Change
Choice $208.63 –  $5.25
Select $194.27 –  $1.44
Ch-Se Spread $14.36 –  $3.81

 

Futures

Feeder Cattle  Dec. 18 Change
Jan ’21 $140.450 + $0.725
Mar $142.300 + $1.750
Apr $143.900 + $2.000
May $144.775 + $2.350
Aug $150.100 + $2.275
Sep $149.900 + $1.950
Oct ’21 $149.550 + $1.825
Nov $148.500 + $1.200

 

Live Cattle   Dec. 18 Change
Dec $110.475 + $1.725
Feb ’21 $114.850 + $1.600
Apr $118.650 + $1.275
Jun $114.075 + $1.475
Aug $113.475 + $1.500
Oct $116.275 + $1.075
Dec $118.500 + $0.850
Feb ’22 $120.100 + $0.975
Apr $120.875 + $1.050

 

Corn  Dec. 18 Change
Mar ’21 $4.374 + $0.140
May $4.392 + $0.128
Jly $4.396 + $0.114
Sep $4.230 + $0.090
Oct $4.184 + $0.062
Mar ’22 $4.234 + $0.058

 

Oil CME-WTI Dec. 18 Change
Jan ’21 $49.10 + $2.53
Feb $49.24 + $2.49
Mar $49.34 + $2.47
Apr $49.40 + $2.44
May $49.40 + $2.40
Jun $49.33 + $2.36

Equities

Equity Indexes Dec. 18 Change
Dow Industrial Average  30179.05 +  132.68
NASDAQ  12755.64 +  377.77
S&P 500   3709.41 +    46.18
Dollar (DXY)       89.92 –       1.06
December 20th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 11, 2020

Calves and feeder cattle sold from $5/cwt. lower to $5 higher, according to the Agricultural Marketing Service (AMS). Auction receipts were heavy as some markets hosted their last sales before the holidays, which caused some truck shortages.

AMS analysts say the strongest demand was for lighter-weight calves (300-450 lbs.) suitable for summer grazing, as well as heavy yearlings that fit the April board.

In his weekly market comments, Andrew P. Griffith, agricultural economist at the University of Tennessee says, “There is no doubt the strongest demand (Tennessee) has continued to be for weaned and vaccinated calves as was evident by the $11/cwt. premium for 525-lb. calves. The expectation is that the run of calves will slow through the end of the year with the holiday season knocking on the door, but favorable weather conditions could result in some producers continuing to set wheels under their calf crop. The slightly stronger calf prices the past couple of weeks are largely due to higher Feeder Cattle futures prices.”

Feeder Cattle futures closed an average of $1.06 higher week to week on Friday, except for 5¢ lower in spot Jan.

“Most Feeder Cattle futures contract prices have displayed considerable strength the past two weeks and are trading at the upper end of the recent trading range. This does not mean they have traded to the contract high, but there is reason to believe Feeder Cattle futures will, at a minimum, hold their ground for a little while and maybe even move higher,” Griffith says.

At the same time, grain futures continue to find support from lower estimated ending stocks in the U.S., as well as uncertainty about crop weather in South America.

USDA’s Economic Research Service (ERS) left the season-average corn price for 2020-21 unchanged at $4/bu., in the latest monthly World Agricultural Supply and Demand Estimates (WASDE). They increased the season average soybean price 15¢ to $10.55 bu. Projected wheat price was unchanged at $4.70/bu.

Fed Cattle Prices Softer

Last week, negotiated cash fed cattle prices were generally $2 lower on a live basis in the Southern Plains at $108/cwt., and $4-$5 lower in the western Corn Belt at $104-$105. Dressed trade was $4 lower in the western Corn Belt at $168. The previous week, prices in Nebraska were at $110 on a live basis and at $172-$174 in the beef.

Estimated total cattle slaughter last week of 665,000 head was 2,000 head fewer than the previous week and 11,000 head fewer than the same week last year. Total estimated year-to-date cattle slaughter of 30.63 million head is 1.07 million less (-3.38%) than a year earlier.

Live Cattle futures closed an average of 91¢ higher week to week on Friday (45¢ to $1.55 higher) except for 12¢ lower in spot Dec.

“Futures traders make trades based on many different sets of information, and a coronavirus vaccine may be one of them. However, it is not known how consumers will react when a vaccine is available to the general public, nor will the change affect long-term beef and cattle prices,” Griffith says.

He’s referring to Friday’s announcement thatthe U.S. Food and Drug Administration (FDA) issued emergency use authorization for a vaccine for the prevention of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in individuals 16 years of age and older. The emergency use authorization allows the Pfizer-BioNTech COVID-19 Vaccine to be distributed in the U.S.

WASDE projected the annual average five-area direct steer price for next year $1 higher than the previous month at $115/cwt. That would be $6.54 more than this year’s estimated average of $108.46. For next year, prices are forecast at $113 in the first and second quarters; $114 in the third.

Beef Values Keep Sinking

Wholesale beef values declined significantly last week as holiday buying appeared to be complete.

Choice boxed beef cutout value was $21.14 lower week to week on Friday at $213.88/cwt. Select was $21.80 lower at $195.71.

“The large week-over-week price decline is a good indicator that retailers and restaurants have met their immediate needs as it relates to beef purchases. There is sure to be some late-year purchases to restock meat counters following the run consumers will make at grocery stores the next couple of weeks, but the process of restocking is unlikely to make boxed beef prices shoot higher,” Griffith explains.

Moreover, Griffith says it’s likely cutout prices will continue to decline, Choice more than Select, as consumer demand in the winter typically shifts seasonally away from middle meats and toward end meats.

Overall, Griffith says, “Beef demand has remained strong throughout the pandemic, and reopening of restaurants and food service will most likely send the market back to pre-coronavirus tendencies.”

Estimated beef production for last week of 559 million lbs. is 800,000 less than the previous week. Estimated year-to-date beef production of 25.46 billion lbs. is 227 million lbs. less (-0.88 %) than the same time last year.

The average dressed steer weight the week ending Nov. 28 was 921 lbs., which was 2 lbs. lighter than the previous week but 10 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight was 850 lbs., which was 3 lbs. heavier than the prior week and 10 lbs. heavier than the prior year.

The WASDE forecasts U.S. beef production for next year at 27.26 billion lbs., which was 105 million lbs. less than the previous month’s projection, on lower expected fed and non-fed cattle slaughter in the first half of 2021. If realized, beef production next year would be just 22 million lbs. more than this year.

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 11 Auction Direct

Video/net

Total
 

354,700

(+76,100)

27,000

(-7,500)

5,500

(-54,500)

387,200

(+14,100)

 

 

CME Feeder Index

CME Feeder Index* Dec. 10 Change
  $136.66 –  $2.52

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.11 Change
600-700 lbs. $150.74 –   $1.63
700-800 lbs. $141.42 –   $2.31
800-900 lbs. $136.69 –   $4.30

 

South Central

Steers-Cash Dec. 11 Change
500-600 lbs. $155.94 + $1.70
600-700 lbs. $141.69 + $0.22
700-800 lbs. $135.67 –  $1.62

 

Southeast

Steers-Cash Dec. 11 Change
400-500 lbs. $154.44 + $0.27
500-600 lbs. $139.60 –  $0.74
600-700 lbs. $128.67 –  $1.55

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 11 ($/cwt) Change
Choice $213.88 –  $21.14
Select $195.71 –  $21.80
Ch-Se Spread $18.17 +   $0.66

 

Futures

Feeder Cattle  Dec. 11 Change
Jan ’21 $139.725 –  $0.050
Mar $140.550 + $1.125
Apr $141.900 + $1.125
May $142.425 + $0.800
Aug $147.825 + $0.975
Sep $147.950 + $1.400
Oct ’21 $147.725 + $1.225
Nov $147.300 + $0.775

 

Live Cattle   Dec. 11 Change
Dec $108.750 –  $0.125
Feb ’21 $113.250 + $0.850
Apr $117.375 + $1.200
Jun $112.600 + $1.550
Aug $111.975 + $1.350
Oct $115.200 + $0.750
Dec $117.650 + $0.475
Feb ’22 $119.125 + $0.450
Apr $119.825 + $0.675

 

Corn  Dec. 11 Change
Dec $4.242 + $0.072
Mar ’21 $4.234 + $0.030
May $4.264 + $0.032
Jly $4.282 + $0.042
Sep $4.140 + $0.036
Oct $4.122 + $0.020

 

Oil CME-WTI Dec. 11 Change
Jan ’21 $46.57 + $0.31
Feb $46.75 + $0.33
Mar $46.87 + $0.33
Apr $46.96 + $0.36
May $47.00 + $0.39
Jun $46.97 + $0.41

Equities

Equity Indexes Dec. 11 Change
Dow Industrial Average  30046.37 –   171.89
NASDAQ  12377.87 –    86.36
S&P 500   3663.46 –    35.66
Dollar (DXY)       90.98 +     0.17
December 13th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 4, 2020

Cash and futures cattle prices emerged from the Thanksgiving holiday with mixed signals, tied in part to wonderments about beef demand following the year-end holidays.

Nationwide, calves and feeder cattle sold from $2/cwt. lower to $3 higher, compared to two weeks earlier, according to the Agricultural Marketing Service (AMS).

“Calves suitable for grazing, coming out of the Southeast, showed the most price support,” say AMS analysts. “Yearlings were still in demand, but at a lower price point than before the Thanksgiving Day holiday.” 

Feeder Cattle futures closed an average of 36¢ higher week to week on Friday, except for 5¢ and 7¢ lower at either end of the board. They were helped along by month-end profit taking that left Corn futures an average of 10¢ lower through the front six contracts, week to week on Friday. 

AMS analysts note feedlots are currently penciling cost of gain at around $1/lb. At the same time, they point our spot Live Cattle futures ended the week $11.32 lower year over year; $12.57 lower for Feb.

“The premium on preconditioned cattle will not deteriorate moving forward, but all calf prices will strengthen moving into 2021. The market is expected to heat up in the middle of February and moving through the end of April,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf market naturally leads into the feeder cattle market which is also expected to strengthen in 2021. Recent yearling cattle prices have not been bad, but they have been hampered by the number of cattle on feed and many feedlots being full.”

Fed Cattle Trade Unevenly Steady

For the week, negotiated cash fed cattle prices were $1 lower to $1 higher on a live basis in the Texas Panhandle at $110-$112/cwt. They were $1 lower in Kansas at $110. Live prices were steady to $1 lower in Nebraska at $109-$110 and steady to $1 lower in the western Corn Belt at $109. Dressed trade was steady to $2 lower at $172-$174.

“The hope of hitting $115 before the end of the year is diminishing quickly for finished cattle. They held their ground the past couple of weeks, but they could not find any traction to push higher. It is beginning to get a little late in the year for holiday beef buying to provide a significant boost to the aforementioned price level,” Griffith says. “There will most likely be a surge in beef purchases to restock the meat counter if consumers pull on beef for Christmas and New Year’s, but there is no guarantee it will provide significant support to push cattle prices higher. The expectation at this point, through the end of the year, is for finished cattle prices to trade steady with $1 to $2 swings possible in either direction.”

Live Cattle futures closed an average of 86¢ lower week to week on Friday, from 22¢ lower to $1.75 lower in spot Dec, except for 17¢ to 30¢ higher in the back two contracts.

AMS analysts point out that a year ago last week was the first one that the Tyson plant in Holcombe, KS reopened following the fire that shuttered it the previous August.

Beef Prices Take Seasonal Turn

If last week is any indication, the seasonal surge in wholesale beef values has about run its course.

Choice boxed beef cutout value was $7.83 lower week to week on Friday at $235.02/cwt. Select was $3.17 lower at $217.51.

The average steer carcass weight for the week ending Nov. 21 was 923 lbs., which was 7 lbs. lighter than the previous week but 12 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average heifer carcass weight was 847 lbs., which was 1 lb. heavier than the prior week and 5 lbs. heavier than the previous year.

“What appeared to be happening was some last-minute holiday purchases and some purchases to fulfill consumer demand when January and February arrive,” Griffith explains. “There is a good chance that there will be some good deals on Choice roasts relative to Select roasts moving into the middle of winter. Many folks in the industry have made comments about consumer demand and if it will persist. Given the past eight or nine months, one would have to assume that consumers will continue to demand beef. The relatively strong demand will support beef prices through the winter. Another round of government aid to the general public would also go a long way to promoting beef movement. Such aid simply adds to disposable income.”

Friday to Friday Change

Weekly Auction Receipts

 

Dec. 4 Auction Direct

Video/net

Total
 

278,600

(+166,300)

34,500

(-800)

60,000

(+58,400)

373,100

(+223,900)

 

 

CME Feeder Index

CME Feeder Index* Dec. 3 Change
  $139.18 + $1.62

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec.4 Change
600-700 lbs. $152.37 +  $5.26
700-800 lbs. $143.73 +  $2.57
800-900 lbs. $140.99 –   $1.63

 

South Central

Steers-Cash Dec. 4 Change
500-600 lbs. $154.24 + $4.74
600-700 lbs. $141.47 + $0.07
700-800 lbs. $137.29 –  $2.94

 

Southeast

Steers-Cash Dec. 4 Change
400-500 lbs. $154.17 + $7.58
500-600 lbs. $140.34 + $3.50
600-700 lbs. $130.22 + $0.42

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 4 ($/cwt) Change
Choice $235.02 –  $7.83
Select $217.51 –  $3.17
Ch-Se Spread $17.51 –  $4.66

 

Futures

Feeder Cattle  Dec. 4 Change
Jan ’21 $139.775 –  $0.050
Mar $139.425 + $0.425
Apr $140.775 + $0.450
May $141.625 + $0.400
Aug $146.850 + $0.650
Sep $146.550 + $0.100
Oct ’21 $146.500 + $0.150
Nov $146.525 –  $0.075

 

Live Cattle   Dec. 4 Change
Dec $108.875 –  $1.750
Feb ’21 $112.400 –  $0.850
Apr $116.175 –  $0.775
Jun $111.050 –  $0.850
Aug $110.625 –  $0.725
Oct $114.450 –  $0.225
Dec $117.175 + $0.175
Feb ’22 $118.675 + $0.300
Apr $119.150 -0-

 

Corn  Dec. 4 Change
Dec $4.170 –  $0.084
Mar ’21 $4.204 –  $0.132
May $4.232 –  $0.134
Jly $4.240 –  $0.132
Sep $4.104 –  $0.070
Oct $4.102 –  $0.042

 

Oil CME-WTI Dec. 4 Change
Jan ’21 $46.26 + $0.73
Feb $46.42 + $0.68
Mar $46.54 + $0.63
Apr $46.60 + $0.59
May $46.61 + $0.55
Jun $46.56 + $0.49

Equities

Equity Indexes Dec. 4 Change
Dow Industrial Average  30218.26 +  307.89
NASDAQ  12464.23 +  258.38
S&P 500   3699.12 +     60.77
Dollar (DXY)       90.81 –        0.98
December 6th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 27, 2020

Cattle futures bounced back last week, gaining back more than was lost the previous week, helped along by higher outside markets.

That started to show up in cash prices paid at late-week sales, keeping in mind receipts were significantly lower due to the holiday.

Feeder Cattle futures closed an average of $3.80 higher week to week on Friday, from $2.77 higher to $5.22 higher in spot Jan.

“Feeder markets are reflecting a mix of influences including seasonal supplies of calves, wheat pasture forage conditions, higher corn prices and volatility in futures markets,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Feeder markets have been very dynamic and it means that both cow-calf and stocker producers must constantly evaluate changing market conditions.”

For instance, Peel pointed to the currently steeper price rollback on calves lighter than 600 lbs. and the impact on value of gain. He gave the example of cow-calf producers selling calves at weaning, explaining recent prices mean the value of adding 50 lbs. to a 500-lb. steer is about 50¢/lb.

“For producers holding calves after weaning, the low value of gain must be balanced against the value of preconditioning programs and extra weaning time before sale,” Peel said. “The implications of current market conditions depend on the current weight of animals and the amount of additional weight added to animals prior to sale.”

Fed Cattle Prices Gain

Seasonal strength in wholesale beef values helped lift fed cattle prices last week.

Choice boxed beef cutout value was $4.50 higher week to week on Friday at $242.85/cwt. Select was $5.70 higher at $220.68.

The average dressed steer weight for the week ending Nov. 14 was 930 lbs., which was 6 lbs. heavier than the previous week and 18 lbs. heavier than the prior year. That’s according to the most recent Actual Slaughter Under Federal Inspection report from USDA. The average dressed heifer weight of 846 lbs. was the same as a week earlier but 5 lbs. heavier than the same week last year.

Negotiated cash fed cattle prices ended the week generally steady to $1 higher on a live basis and $2 higher in the beef, according to the Agricultural Marketing Service.

Live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $174.

Live Cattle futures closed an average of $2.17 higher week to week on Friday, from $1.32 higher toward the back to $2.70 higher.

“This year’s December Live Cattle contract closed at $111.25 on Friday, which was $9.05 lower than last year, while the February contract is $11.37 lower than last year,” explain AMS analysts.

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 27 Auction Direct

Video/net

Total
 

112,300

(-209,600)

35,300

(-10,100)

1,600

(-8,200)

149,200

(-227,900)

 

 

CME Feeder Index

CME Feeder Index* Nov. 25 Change
  $136.90 –  $0.61

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 27 Change
600-700 lbs. $147.11 +  $0.60
700-800 lbs. $141.16 +  $0.01
800-900 lbs. $142.62 –   $0.09

 

South Central

Steers-Cash Nov. 27 Change
500-600 lbs. $149.50 –  $2.15
600-700 lbs. $141.40 + $0.49
700-800 lbs. $140.23 + $3.29

 

Southeast

Steers-Cash Nov. 27 Change
400-500 lbs. $146.59 –  $5.72
500-600 lbs. $136.73 –  $1.28
600-700 lbs. $129.80 + $1.20

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 27 ($/cwt) Change
Choice $242.85 + $4.50
Select $220.68 + $5.70
Ch-Se Spread $22.17 –  $1.20

 

Futures

Feeder Cattle  Nov. 27 Change
Jan ’21 $139.825 + $5.225
Mar $139.000 + $4.625
Apr $140.325 + $4.150
May $141.225 + $3.775
Aug $146.200 + $2.775
Sep $146.450 + $3.200
Oct ’21 $146.350 + $3.150
Nov $146.600 + $3.475

 

Live Cattle   Nov. 27 Change
Dec $110.625 + $2.525
Feb ’21 $113.250 + $2.600
Apr $116.950 + $2.500
Jun $111.900 + $2.650
Aug $111.350 + $2.700
Oct $114.675 + $2.025
Dec $117.000 + $1.875
Feb ’22 $118.375 + $1.325
Apr $119.150 + $1.350

 

Corn  Nov. 27 Change
Dec $4.254 + $0.022
Mar ’21 $4.336 + $0.054
May $4.366 + $0.060
Jly $4.372 + $0.066
Sep $4.174 + $0.068
Oct $4.144 + $0.062

 

Oil CME-WTI Nov. 27 Change
Dec $45.53 + $3.11
Jan ’21 $45.74 + $3.10
Feb $45.91 + $3.07
Mar $46.01 + $2.99
Apr $46.06 + $2.91
May $46.07 + $2.80

 

Equities

Equity Indexes Nov. 27 Change
Dow Industrial Average  29910.37 +  646.89
NASDAQ  12205.85 +  350.88
S&P 500   3638.35 +     80.81
Dollar (DXY)       91.78 –         0.61
November 29th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 20, 2020

Doggedly higher grain prices, languishing cash fed cattle prices and increasing demand uncertainty added bearishness to cattle markets as last week progressed.

Calves and yearlings sold steady to $3/cwt. higher early in the week and steady to $4 lower later on, according to the Agricultural Marketing Service.

“With the higher grain prices and forage prices, we will see persistent pressure on feeder cattle and calf prices into 2021,” says Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets. “One dollar higher corn costs translate into about $6-$7/cwt. lower feeder cattle prices. This cattle price impact is being exacerbated by dry conditions in the western U.S. and hay prices that are creeping higher. The impact on calf prices will be greater.”

Koontz points out Corn futures (2020-21 crop) are about $1 higher than in August and Soybean futures are about $2 higher, including deferred contracts. He adds that prices for both appear to be at a premium to what underlying fundamentals suggest.

Feeder Cattle futures closed an average of $2.21 lower week to week on Friday, from $1.67 lower at the back to $3.27 lower in spot Jan.

USDA’s Economic Research Service (ERS) lowered the expected fourth-quarter feeder steer price by $6 from the previous month to $137/cwt., in the latest Livestock, Dairy and Poultry Outlook (LDPO). That’s basis Oklahoma City for Medium #1. The lower revision is based on seasonal price weakness and cash prices in October down more than $9 year over year at $137.55. ERS reduced expected feeder steer prices for next year by $1, based on higher projected feed prices.

Specifically, ERS forecasts feeder steer prices next year at $133 in the first quarter, $136 in the second, $141 in the third; annual average price of $138.

Feedlot Placements Down 11%

Heading into the new week, markets will likely view Friday’s monthly Cattle on Feed report as neutral, if not a touch friendly.

October placements of 2.19 million head in feedlots with 1,000 head or more capacity were 10.97% less than a year earlier. Estimates ahead of the report suggested placements to be about 1.5% more.

Marketings of 1.87 million head in October were just 2,000 fewer than a year earlier, about in line with pre-report estimates.

Cattle on feed Nov. 1 numbered 11.97 million head, which was 1.33% more than a year earlier. That was slightly less than expectations, but the most for the month since the data series began in 1996.

Fed Cattle Prices Steady

Negotiated cash fed cattle prices ended last week steady, according to data from the Agricultural Marketing Service (AMS). Live prices were at $110/cwt. in the Southern Plains and Nebraska and at $109-$110 in the western Corn Belt. Dressed prices are steady at $172.

Live Cattle futures closed an average of $1.50 lower week to week on Friday, from 95¢ to $2.00 lower.

“Heavy cattle continue to put pressure on some regional markets, but it is becoming less and less of a concern with each passing week. Prices may be a little softer next week with the shortened kill week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

“Despite the rising number of cattle on feed, front-end supplies—the number of cattle on feed over 150 days—decreased for the third consecutive month as a percentage and in volume,” say ERS analysts, in the LDPO. “This is the result of an improving pace of fed cattle slaughter, which was faster than a year ago for the last three months and above the five-year average. The quickening slaughter pace, combined with an ample supply of fed cattle at heavier weights, led to higher expected beef production in fourth-quarter 2020 relative to 2019. Nevertheless, tighter front-end supplies will likely support continued seasonal movement in fed steer prices.”

ERS left the expected five-area direct fed steer price unchanged for the fourth quarter ($109) and for next year: $113 in the first quarter, $110 in the second quarter, $114 in the third quarter; annual average price of $114.

Boxed Beef Prices Continue Higher

Choice boxed beef cutout value was $12.37 higher week to week on Friday at $238.35/cwt. Select was $5.52 higher at $214.98. That’s $24.03 higher for Choice over the past two weeks and $16.49 higher for Select.

“Sharp upticks in Daily Boxed Beef prices this week caught many observers off-guard with Rib meats leading the charge,” say AMS analysts. “Wholesalers and retailers continued to buy beef out front to cover their customers’ needs moving towards the Christmas holiday season.”

By most measures, domestic consumer beef demand remains resilient in the face of multifold pandemic challenges, but those challenges will likely increase heading into winter.

“Loss of outdoor dining in cold weather will further aggravate restaurant challenges.  Food service demand is likely to be additionally affected with worsening public health challenges. Macroeconomic concerns will grow as consumers go forward with less unemployment support,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Ample supplies of beef, pork and poultry increase market price pressure, though disruptions in supply are a threat as well.”  

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 20 Auction Direct

Video/net

Total
 

321,900

(+16,600)

45,400

(-29,700)

9,800

(-600)

377,100

(-13,700)

 

 

CME Feeder Index

CME Feeder Index* Nov. 19 Change
  $136.75 –  $0.60

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 20 Change
600-700 lbs. $146.51 –   $3.07
700-800 lbs. $141.15 –   $0.38
800-900 lbs. $142.71 +  $0.69

 

South Central

Steers-Cash Nov. 20 Change
500-600 lbs. $151.65 –  $0.22
600-700 lbs. $140.91 + $0.06
700-800 lbs. $136.94 –  $2.75

 

Southeast

Steers-Cash Nov. 20 Change
400-500 lbs. $152.31 + $0.64
500-600 lbs. $140.91 + $2.38
600-700 lbs. $128.60 –  $0.58

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 20 ($/cwt) Change
Choice $238.35 + $12.37
Select $214.98 + $5.52
Ch-Se Spread $23.37 + $6.85

 

Futures

Feeder Cattle  Nov. 20 Change
Jan ’21 $134.600 –  $3.275
Mar $134.375 –  $2.775
Apr $136.175 –  $2.450
May $137.450 –  $2.150
Aug $143.425 –  $1.325
Sep $143.250 –  $1.850
Oct ’21 $143.200 –  $1.675
Nov $143.125 n/a

 

Live Cattle   Nov. 20 Change
Dec $108.100 –  $1.825
Feb ’21 $110.650 –  $1.575
Apr $114.450 –  $1.750
Jun $109.250 –  $1.925
Aug $108.650 –  $2.000
Oct $112.650 –  $0.975
Dec $115.125 –  $1.075
Feb ’22 $117.050 –  $0.950
Apr $117.800 –  $1.425

 

Corn  Nov. 20 Change
Dec $4.232 + $0.128
Mar ’21 $4.282 + $0.088
May $4.306 + $0.066
Jly $4.306 + $0.044
Sep $4.106 + $0.050
Oct $4.082 + $0.038

 

Oil CME-WTI Nov. 20 Change
Dec $42.15 + $2.02
Jan ’21 $42.42 + $2.02
Feb $42.64 + $1.94
Mar $42.84 + $1.83
Apr $43.02 + $1.72
May $43.15 + $1.60

 

Equities

Equity Indexes Nov. 20 Change
Dow Industrial Average  29263.48 –   216.33
NASDAQ  11854.97 +      25.68
S&P 500   3557.54 –       27.61
Dollar (DXY)       92.40 –         0.32
November 22nd, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 13, 2020

Recent futures market strength, stronger wholesale beef values and higher negotiated cash fed cattle prices added support to calves and feeder cattle last week.

Steers and heifers sold $2-$5/cwt. higher, with instances of $7-$10 higher at some auctions, according to the Agricultural Marketing Service (AMS).

“Calf movement in the Northern Plains is in full swing as drought conditions bring cattle to town earlier than normal,” say AMS analysts. “With the earlier time period of marketing their calves, drought-stricken ranchers are selling less pounds which will lead to less dollars in the bank account.”

With that said, year-to-date auction receipts through last week were 487,000 head fewer than the same period last year, according to AMS; 520,000 head fewer than the five-year average. Direct receipts for the last five weeks are more than 70,000 head behind last year’s pace.

Feeder Cattle futures closed an average of $1.65 higher week to week on Friday (65¢ to $2.20 higher) except for 22¢ lower in spot Nov. That was in the face of stronger grain prices fueled by the crop friendly World Agricultural Supply and Demand Estimates (WASDE)

USDA increased the projected season-average corn price by 40¢ to $4.00/bu., on reduced expected corn yield, production and ending stocks. The same drivers were behind the 60¢ increase in the projected season-average soybean price to $10.40/bu.

Week to week on Friday, Corn futures closed an average of 7¢ higher through the front six contracts. Soybean futures closed an average of 46¢ higher through the front six contracts.

Cattle futures also gained week to week despite a sharp drop Friday, tied to apparent concerns that escalating COVID-19 cases could once again disrupt packing production.

“October was a tough month for calf prices, but if the first two weeks of November is any indication of what is to come, then cattle producers should be seeing the light at the end of the tunnel,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Steer and heifer calf prices surged the past two weeks, based on Tennessee weekly auction market average prices. It is clear that stocker and backgrounding operations still have a strong demand for weaned and preconditioned cattle, but calves being weaned on the truck have also seen a price boost…There is a good chance that freshly weaned calf values increase $20 to $30 per head before the end of the year if there is any bounce in the market at all heading into December.”

Prices in the Southern Plains were also boosted by recent moisture and elevated wheat pasture prospects.

For instance, in Oklahoma, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says prices the previous week for steers weighing 450-600 lbs. were the highest since late August and early September. He notes the combined state auction price for Medium and Large #1 steers at 450-500 lbs. the previous week was $166.89/cwt. compared to $147.34 a week earlier, when storm severity helped damper markets.

Noting currently higher value of gain for cattle heavier than 600 lbs., as well as a possibly shorter winter grazing season, Peel says, heavier starting weights might make sense for stocker producers to consider.

“The next few weeks may result in additional demand for stockers but will likely also see larger supplies of feeder cattle in Oklahoma auctions. Combined Oklahoma auction volume the past six weeks was down nearly 33%, in part due to the impacts of the winter storm,” Peel explained in his weekly market comments. “It appears there are significant numbers of calves and feeders yet to be marketed this fall. Stocker and feeder prices could move either higher or lower in the next month depending on the balance of increased demand and increased supply in auctions.”

Fed Cattle Prices Increase

Negotiated cash fed cattle tradeended the week with live prices $3 higher at $110/cwt. in Nebraska and the Southern Plains; $3-$4  higher in the western Corn Belt at $108-$110. Dressed prices were at $172, which was $4 higher in Nebraska and $5-$8 higher in the western Corn Belt. Although prices were higher, some thought the market was poised to reap steeper gains.

Through Thursday, the five-area direct weighted negotiated fed steer price was $109.46/cwt. on a live basis, which was $3.11 more than the previous week but $5.69 less than the same week in 2019. The average steer price in the beef was $171.88, which was $6.58 more week to week but $10.07 less year over year.

Live Cattle futures closed an average of 92¢ higher week to week on Friday, from 7¢ higher in near Feb to $1.65 higher.

“The value of cattle this week compared to last week represents an increase of $35 to $40 per head, which makes hitting the $115/cwt. price that much more achievable before the end of the year,” Griffith says. “The strong margins at the packer level and good beef demand have packers salivating for cattle. Some of the strong margins upstream have been passed down to cattle feeders, and cattle feeders are doing the same when purchasing feeder cattle. Optimism in the market is strong heading toward December.”

Estimated total cattle slaughter for the week ending Nov. 14 was 653,000 head, which was 6,000 head more than the previous week but 16,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 28.06 million head would be 1.07 million fewer (-3.67%) than the previous year. Estimated total year-to-date beef production was 23.31 billion lbs., which would be 253.3 million lbs. less (-0.01%) than the previous year.

Choice boxed beef cutout value was $11.66 higher week to week on Friday at $225.98/cwt. Select was $10.97 higher at $209.46. That’s $17.88 higher for Choice over the past two weeks; $18.22 higher for Select.

Carcass weights show signs of peaking following the prolonged period of fed cattle supplies backlogged by the pandemic. The average dressed steer weight of 926 lbs. the week ending Oct. 31 was 5 lbs. lighter than the previous week, though still 23 lbs. heavier than the same week last year. The average dressed heifer weight of 848 lbs. was 1 lb. heavier than the prior week and 13 lbs. heavier than the previous year, according to USDA’s Actual Slaughter Under Federal Inspection report.

“Select grade beef continues to see fairly decent demand during a time when Choice grade prime rib and other holiday cuts take center stage. There is no doubt some holiday purchasing is taking place, but the strong prices for boxed beef could just be simply demonstrating that beef prices are being supported by good demand at the consumer level,” Griffith says. “There always seems to be concern that consumer discretionary spending may move away from beef when things get tight. However, due to the pandemic, many consumers have more than ample discretionary dollars because they are not able to participate in many of their extracurricular activities. Thus, lower incomes may be evident in many households, but leisure expenditures have also been reduced. It will be interesting to see if consumer expenditures revert back to pre-pandemic tendencies moving forward.”

Friday to Friday Change

Weekly Auction Receipts

 

Nov. 13 Auction Direct

Video/net

Total
 

305,300

(+82,400)

75,100

(+48,300)

10,400

(-8,400)

390,800

(+122,300)

 

 

CME Feeder Index

CME Feeder Index* Nov. 12 Change
  $137.35 +  $0.72

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 13 Change
600-700 lbs. $149.58 +  $1.37
700-800 lbs. $141.53 +  $0.20
800-900 lbs. $142.02 +  $1.80

 

South Central

Steers-Cash Nov. 13 Change
500-600 lbs. $151.87 + $3.03
600-700 lbs. $140.85 + $2.28
700-800 lbs. $139.69 + $4.68

 

Southeast

Steers-Cash Nov. 13 Change
400-500 lbs. $151.67 + $3.83
500-600 lbs. $138.53 + $4.27
600-700 lbs. $129.18 + $2.45

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 13 ($/cwt) Change
Choice $225.98 + $11.66
Select $209.46 + $10.97
Ch-Se Spread $16.52 + $0.69

 

Futures

Feeder Cattle  Nov. 13 Change
Nov $137.475 –  $0.225
Jan ’21 $137.825 + $1.900
Mar $137.150 + $1.975
Apr $138.625 + $2.075
May $139.600 + $2.200
Aug $144.750 + $1.625
Sep $145.100 + $1.100
Oct ’21 $144.875 + $0.650

 

Live Cattle   Nov. 13 Change
Dec $109.925 + $1.275
Feb ’21 $112.225 + $0.075
Apr $116.200 + $0.150
Jun $111.175 + $1.150
Aug $110.600 + $1.475
Oct $113.625 + $1.650
Dec $116.200 + $0.950
Feb ’22 $118.000 + $0.700
Apr $119.225 + $0.825

 

Corn  Nov. 13 Change
Dec $4.104 + $0.038
Mar ’21 $4.194 + $0.058
May $4.240 + $0.064
Jly $4.262 + $0.060
Sep $4.056 + $0.094
Oct $4.044 + $0.090

 

Oil CME-WTI Nov. 13 Change
Dec $40.13 + $2.99
Jan ’21 $40.40 + $2.91
Feb $40.70 + $2.80
Mar $41.01 + $2.67
Apr $41.30 + $2.56
May $41.55 + $2.45

 

Equities

Equity Indexes Nov. 13 Change
Dow Industrial Average  29479.81 +  1156.41
NASDAQ  11829.29 –      65.94
S&P 500   3585.15 +      75.71
Dollar (DXY)       92.72 +       0.49
November 15th, 2020|Weekly Market Highlights|

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
November 8th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 30, 2020

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
November 1st, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 23, 2020

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
October 25th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 16, 2020

Continued weakness in wholesale beef values, increasing demand uncertainty and recently resurgent grain prices weighed on cash and futures cattle prices.

Nationwide, steers and heifers sold steady to $3/cwt. lower, according to the Agricultural Marketing Service (AMS) with the strongest demand for remaining yearlings.

“Demand for calves continues to be very dependent upon the health program of the originating producer,” say AMS analysts. “The week ended with much cooler temperatures as an Arctic blast brought frost to a good portion of the Plains.  Lack of moisture continues to avoid the areas that need it the most and the drought areas are slowing intensifying each week.” 

“Feedlots are navigating a tough stretch as it relates to markets and cattle movement. From the market standpoint, cattle feeders are experiencing strong margins, but they need to move cattle to make pen space for some of the high-risk cattle that make their way to the feedlot this time of year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “With fairly inexpensive calves available, feedlot managers would like to capitalize on the strong margins that are available now and place some cattle on feed that have a strong probability of being profitable moving into the second quarter of 2021. These are both good problems, but they still have to be navigated.”

Feeder Cattle futures closed an average of $2.98 lower week to week on Friday, from 15¢ lower in spot Oct to $4.67 lower. That makes for an average of $6.35 lower during the past two weeks.

Although prices for 4-weight and 5-weight cattle remains comparable to the spring, Stephen Koontz, agricultural economist at Colorado State University says, “Basis for these lightweight animals is soft and the market is rather clearly communicating, for producers who can feed calves for another month or two, that delaying marketing should be considered.”

In a recent issue of In the Cattle Markets, Koontz also explains, “The COVID impacts on the fed cattle market continue to almost have entirely run their course. Marketings have been reasonably strong. The number of long-fed cattle are down off their peaks in June and high inventories in the surrounding months of May and July.”

Fed Cattle Prices Stall

For the week, prices were $1 lower on a live basis in the Southern Plains at $108/cwt.; steady to $1 lower in Nebraska at $107-$108/cwt.; steady to $3 lower in the western Corn Belt at $105-$107. Dressed prices were $1 lower in Nebraska at $169 and $1-$3 lower in the western Corn Belt at $167-$168.

Live Cattle futures closed an average of $2.26 lower week to week on Friday ($1.22 lower at the back to $3.97 lower toward the front).  Live Cattle open interest declined by 13,712 contracts week to week on Thursday.

Estimated total cattle slaughter for the week ending Oct. 17 was 654,000 head, according to USDA. That was 17,000 more than the previous week and 11,000 head (+1.71%) more than the same week last year. Year-to-date estimated total cattle slaughter is 25.47 million head, which would be 1.04 million head fewer (-3.92%) than the same time last year. Estimated total beef production so far this year is 21.12 billion lbs., which would be 272.6 million lbs. less (-1.27%) than the same time last year.

Meanwhile, actual total cattle slaughter for the week ending Oct. 3 of 663,777 head was 19,101 head more (+2.96%) than the same week last year. Total fed steer and heifer slaughter under federal inspection of 524,544 head was 20,836 head more (+4.14%) than the prior year. The average dressed steer weight for the week was 924 lbs., which was the same as a week earlier but 25 lbs. heavier than a year earlier. The average dressed heifer weight of 843 lbs. was 5 lbs. heavier than the prior week and 19 lbs. heavier than last year.

Net U.S. beef export sales for 2020 totaled 13,400 metric tons the week ending Oct. 8, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. That was 35% less than the previous week and 34% less than the previous four-week average. Increases were primarily for Japan, Mexico, South Korea, Taiwan and Canada. Net beef export sales for 2021 were 5% less than the previous week and 1% less than the prior four-week average.

Beef Prices Step Lower

Wholesale beef prices continue lower, under seasonal pressure, as well as growing uncertainty about the potential impact of resurgent COVID cases.

Choice boxed beef cutout value was $4.03 lower week to week on Friday at $210.03/cwt. Select was $6.30 lower at $193.52. Over the last two weeks, Choice is $8.85 lower and Select is down $14.09.

“As packers and retailers look forward to holiday beef sales, most have tempered expectations,” Griffith says. “It is difficult to know at this time if consumers will open their wallets to pay for high valued cuts of beef for the holiday gatherings or if those gatherings will even occur in many instances. Many businesses and organizations have already canceled their holiday celebrations which means restaurants and food service continue to miss out on opportunities. This hits the beef industry hard as many of these gatherings include beef as the main course. It will be interesting to see if and how beef moves through the end of the year holidays and if families decide to forego beef as the centerpiece of this year’s meal. If beef movement is not strong, then the signal will be sent down the line with lower prices.”

Friday to Friday Change

Weekly Auction Receipts

 

Oct. 16 Auction Direct

Video/net

Total
 

243,900

(+15,500)

15,300

(-5,700)

8,400

(-15,000)

267,600

(-5,200)

 

 

CME Feeder Index

CME Feeder Index* Oct. 15 Change
  $140.22 –   $1.70

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 16 Change
600-700 lbs. $151.73 –   $0.83
700-800 lbs. $145.20 –   $3.12
800-900 lbs. $142.99 –   $1.71

 

South Central

Steers-Cash Oct. 16 Change
500-600 lbs. $144.07 –  $2.53
600-700 lbs. $139.10 –  $3.40
700-800 lbs. $139.01 –  $2.35

 

Southeast

Steers-Cash Oct. 16 Change
400-500 lbs. $145.13 –  $1.00
500-600 lbs. $134.60 –  $2.27
600-700 lbs. $131.44 + $1.23

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 16 ($/cwt) Change
Choice $210.03 –  $4.03
Select $193.52 –  $6.30
Ch-Se Spread $16.51 + $2.27

 

Futures

Feeder Cattle  Oct. 16 Change
Oct $138.100 –  $0.150
Nov $135.025 –  $0.500
Jan ’21 $129.325 –  $4.675
Mar $128.850 –  $4.500
Apr $130.750 –  $4.300
May $131.375 –  $4.350
Aug $138.700 –  $2.650
Sep $139.725 –  $2.750

 

Live Cattle   Oct. 16 Change
Oct $107.150 – $2.725
Dec $108.625 – $3.975
Feb ’21 $111.475 – $2.825
Apr $113.600 – $2.250
Jun $107.250 – $2.275
Aug $105.975 – $1.900
Oct $108.300 – $1.800
Dec $111.725 – $1.350
Feb ’22 $114.275 – $1.225

 

Corn  Oct. 16 Change
Dec $4.020 + $0.070
Mar ’21 $4.070 + $0.048
May $4.084 + $0.020
Jly $4.086 –  $0.008
Sep $3.950 –  $0.004
Oct $3.956 –  $0.010

 

Oil CME-WTI Oct. 16 Change
Nov $40.88 + $0.28
Dec $41.12 + $0.21
Jan ’21 $41.42 + $0.15
Feb $41.70 + $0.10
Mar $41.95 + $0.05
Apr $42.17 + $0.01

Equities

Equity Indexes Oct. 16 Change
Dow Industrial Average  28606.31 +  19.41
NASDAQ  11671.55 +  91.61
S&P 500   3483.81 +    6.68
Dollar (DXY)       93.72 +    6.68
October 18th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 9, 2020

Increasing volume of spring-born calves and surging corn prices pressured cash calf and feeder cattle prices last week.

Steer and heifer calves traded $1-$3/cwt. lower, while yearling steers and heifers sold steady to $1 lower, according to the Agricultural Marketing Service (AMS).

“As cattle producers bring freshly weaned calves to market in large quantities, the price of calves has come under significant pressure,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This price pressure will persist through November as producers continue to wean this year’s calf crop.”

Dry conditions and drought are adding price pressure in some areas.

For the week of Oct. 6, 62.9% of the continental United States was classified from abnormally dry to exceptional drought, according to the U.S. Drought Monitor. That was 26% more than the same time last year.

“With larger fall runs of calves expected in October and November, the lack of wheat pasture demand may add additional seasonal pressure to calf markets this fall,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Moreover, he says the lack of wheat pasture and other forages may change the timing of calf and feeder cattle sales this fall.

Beyond forage availability to grow cattle, AMS analysts point out drought is pushing cows to town in some areas, such as Nebraska.

“Dry conditions in the state have over 98% of the state in some sort of drought designation; the highest percentage since July 2013,” says AMS analysts. “The question moving forward will be how many cows will leave the farm and go to harvest with a rancher exposed to paying more to keep cows around this winter than he has in the past. Some winter forage piles have started being used already and the calendar shows only the middle of October.”

Feed costs are increasing, too, with the surge in corn and soybean prices.

Week to week on Friday, Corn futures closed an average of 11¢ higher through the front six contracts. That’s an average of 24¢ higher for the same contracts over the past two weeks.

In the latest monthly World Agricultural Supply and Demand Estimates (WASDE), USDA projected the season average corn price received by producers by 10¢ to $3.60/bu.

Week to week on Friday, Soybean futures closed an average of 31¢ higher through the front six contracts. That’s an average of 49¢ higher for the same contracts over the past two weeks.

WASDE forecasts increased the U.S. season-average soybean price for 2020-21 by 55¢ to $9.80/bu.

In both cases, prices are buoyed by recent USDA data lowering projections for harvested area and yield.

Feeder Cattle futures closed an average of $3.37 lower week to week on Friday, from $1.65 lower in spot Oct to $4.35 lower.

Fed Cattle Prices Continue Rise

Negotiated cash fed cattle prices extended gains last week, supported by snugger front-end supplies and indications that cattle feeders continue to erase the backlog of fed cattle.

Regionally, cash prices last week were generally $2 higher in the Southern Plains at $109/cwt. on a live basis; $1-$2 higher in Nebraska and at $108-$109 and steady to $3 higher in the western Corn Belt at $107-$110. Dressed trade was $2-$3 higher at $170.

Through Thursday, the five-area direct negotiated weighted average fed steer price was $107.59/cwt. on a live basis, which was 48¢ higher than the previous week, but $1.49 less than the same time last year. The average price in the beef of $169.29 was $1.61 more than the prior week but 79¢ less than the previous year.

“Prices are about $13/cwt. higher than their summer lows and will likely continue to slowly increase into late fall as the holiday season approaches,” Griffith says. “The fourth-quarter peak price is still expected to exceed $115 with an upper range near $120. It will be tough to reach the $120 mark, but most cattle feeders will be profitable with prices over $115. One major factor that could temper prices in the fourth quarter is a glut of cattle coming off feed in the next 10 to 12 weeks.”

However, except for an average of $1.60 higher in the front two contracts, Live Cattle futures closed an average of $1.15 lower week to week on Friday (42¢ to $1.32 lower).

In the latest WASDE USDA’s Economic Research Service (ERS) increased projected fed cattle prices for this year and next. Specifically, ERS increased the 2020 annual average price (five-area direct) by $1.41 to $108.71/cwt., compared to the previous month, with a fourth-quarter price projection of $109. That’s based on current price strength and robust beef demand.

The forecast annual average fed steer price for 2021 increased by $2 to $114. Prices are projected to be $113 in the first quarter, $110 in the second quarter and $114 in the third quarter.

That’s with a projected increase in beef production both this year and next.

ERS projects beef production for this year at 27.14 billion lbs., which was 90 million lbs. more than the previous month’s estimate. That’s based on expectations for increased slaughter in the second half of the year. The total would be 17 million lbs. less than last year. Projections for beef production in 2021 increased 10 million lbs. to 27.37 billion lbs., which would be 227 million lbs. more than this year.

In the meantime, wholesale beef values continue their seasonal slumber.

Choice boxed beef cutout value was $4.82 lower week to week on Friday at $214.06/cwt. Select was $7.79 lower at $199.82.

“Wholesale beef prices will struggle to find much support the next four to six weeks as the market moves through a soft demand time period,” Griffith explains. “Following Thanksgiving, middle meats will provide the holiday support for the market as the rib will take front and center stage. Consumer demand will be the driving factor for prices, but competing meat prices will also play a role.”

Based on the latest data, demand for U.S. beef exports is beginning to rebound.

Beef muscle cut exports in August were the largest in more than a year at 89,148 metric tons (mt), up 3.5% year-over-year, led by record-large demand in South Korea and Taiwan, according to data compiled by the U.S. Meat Export Federation (USMEF). Export value increased slightly from a year ago to $611 million.

Variety meat exports were lower year over year, though, due in part to the lack of available labor required to harvest and export some items.

Combined beef/beef variety meat exports were 109,752 mt in August, down 4.5% from a year ago. Export value was $673.8 million, down 2% from a year ago but the highest since March.

For January through August, beef muscle cut exports were 6% below last year’s pace in volume (627,248 mt) and 9% lower in value ($4.38 billion). Beef/beef variety meat exports were down 8% to 808,659 mt, valued at $4.95 billion (down 9%).

“The upward trend in muscle cut exports is very encouraging and especially critical as beef and pork production continue to rebound from the interruptions earlier in the year,” says Dan Halstrom, USMEF president and CEO. “Maintaining variety meat volumes has been especially challenging this year but we continue to expand and develop destinations for these items, which are essential to maximizing carcass value.”

Beef export value per head of fed slaughter averaged $302.82 in August, up 1% from a year ago. The January-August average was down 4% to $297.96.

Friday to Friday Change

Weekly Auction Receipts

 

Oct. 9 Auction Direct

Video/net

Total
 

228,400

(+21,200)

21,000

(-18,700)

23,400

(+18,900)

272,800

(+21,400)

 

 

CME Feeder Index

CME Feeder Index* Oct. 8 Change
  $141.92 –   $1.04

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 9 Change
600-700 lbs. $152.56 –   $2.03
700-800 lbs. $148.32 –   $1.17
800-900 lbs. $144.70 –   $0.36

 

South Central

Steers-Cash Oct. 9 Change
500-600 lbs. $146.60 –  $1.21
600-700 lbs. $142.50 –  $0.68
700-800 lbs. $141.36 –  $0.88

 

Southeast

Steers-Cash Oct. 9 Change
400-500 lbs. $146.13 –  $2.77
500-600 lbs. $136.87 + $0.47
600-700 lbs. $130.21 + $0.73

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 9 ($/cwt) Change
Choice $214.06 –  $4.82
Select $199.82 –  $7.79
Ch-Se Spread $14.24 + $2.97

 

Futures

Feeder Cattle  Oct. 9 Change
Oct $138.250 –  $1.650
Nov $135.525 –  $4.350
Jan ’21 $134.000 –  $4.000
Mar $133.350 –  $4.075
Apr $135.050 –  $3.850
May $135.725 –  $4.200
Aug $141.350 –  $3.000
Sep $142.475 –  $1.875

 

Live Cattle   Oct. 9 Change
Oct $109.875 + $1.700
Dec $112.600 + $1.500
Feb ’21 $114.300 – $0.425
Apr $115.850 – $1.300
Jun $109.525 – $1.200
Aug $107.875 – $1.325
Oct $110.100 – $1.300
Dec $113.075 – $1.325
Feb ’22 $115.500 – $1.200

 

Corn  Oct. 9 Change
Dec $3.950 + $0.154
Mar ’21 $4.022 + $0.130
May $4.064 + $0.118
Jly $4.094 + $0.110
Sep $3.954 + $0.072
Oct $3.966 + $0.056

 

Oil CME-WTI Oct. 9 Change
Nov $40.60 + $3.55
Dec $40.91 + $3.57
Jan ’21 $41.27 + $3.53
Feb $41.60 + $3.45
Mar $41.90 + $3.35
Apr $42.16 + $3.24

Equities

Equity Indexes Oct. 9 Change
Dow Industrial Average  28586.90 +  904.09
NASDAQ  11579.94 +  504.92
S&P 500   3477.13 +  128.69
Dollar (DXY)       93.03 –        0.78
October 10th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 2, 2020

Cattle futures took the previous week’s bearish monthly Cattle on Feed report to start the week but then received another round of pressure from the crop-friendly quarterly Grain Stocks report.

Feeder Cattle futures took the brunt, along with cash prices, to a point, while stronger cash fed cattle prices provided underpinning.

Nationwide, steers and heifers sold from $2/cwt. lower to $2 higher, according to the Agricultural Marketing Service (AMS).

“Demand remains good for yearling cattle, with light to moderate demand for fresh calves,” say AMS analysts. “Bawling and un-weaned calves continue to see discounts and are much less desirable to buyers as is typical for this time of year. Buyers are quite willing to pay premiums for cattle if producers invest time in them and provide a documented health program.”

Feeder Cattle futures closed an average of 72¢ lower week to week on Friday, with much of the pressure coming from higher grain prices.

Old crop corn stocks in all positions on Sept. 1 of 2.00 billion bu., were 10% less than a year earlier and significantly less than the trade expected, according to the aforementioned grain stocks report.

Week to week on Friday, Corn futures closed an average of 13¢ higher through the front six contracts.

Similarly, old crop soybeans stored in all positions were 42% less than a year earlier at 523 million bu., significantly less than the trade expected.

Week to week on Friday, Soybean futures closed an average of 18¢ higher through the front six contracts.

“As we work through 2020 and into 2021, feeder cattle supplies should continue to tighten modestly,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. In his weekly market comments, Peel pointed out total feedlots placements are 4.2% less than last year for the year to date, despite significant increases the last two months.

Fed Cattle Prices Gain

For the week, live sales in the Southern Plains were mostly $2 higher at $107/cwt., with a few up to $108 in the Texas Panhandle. Live prices were $2 higher in Nebraska at $107 and $2-$3 higher in the western Corn Belt at $107-$108. Dressed trade was $2-$3 higher at $167-$168.

Through Thursday, the average five-area direct steer price was $107.11/cwt. on a live basis, which was $2.08 higher than the previous week. The average price in the beef was $2.81 higher at $167.68.

Except for an average of 39¢ lower in two contracts, Live Cattle futures closed an average of 48¢ higher week to week on Friday.

“This week’s prices are still a long way from the fourth quarter target high between $115 and $120, but a $7 to $8 price improvement over the next two months is obtainable,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Reaching the afore-mentioned price target for a fourth quarter apex will likely result in strong competition for feeder cattle moving forward.”

In the meantime, Peel explains, “The July-August bulge in placements suggests higher feedlot marketings in the first quarter of 2021. July placements were skewed to the lighter weight cattle, while August placements included more heavyweight placements, which further implies that cattle could be somewhat bunched up. However, winter weather typically spreads cattle out a bit, so the exact timing is uncertain. The ripples from the first half of 2020 will extend into early 2021.”

Wholesale beef values hovered on either side of steady. Choice boxed beef cutout value was 46¢ lower week to week on Friday at $218.88/cwt. Select was 63¢ higher at $207.61.

The average dressed steer weight for the week ending Sept. 19 was 919 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. Although 23 lbs. heavier than the previous year, the average weight was 1 lb. lighter than the previous week. That was the first week-to-week decline since mid July, according to AMS.

The actual dressed heifer weight of 836 lbs. was the same as a week earlier, but 13 lbs. heaver than the same week last year.

“Boxed beef prices were in a holding pattern this week…This is fairly typical of the early fall beef market, and this pattern may persist for a few weeks,” Griffith says. “There are several factors that may influence the beef market moving through the last quarter of the year. The first would be more stimulus money being deposited in the bank accounts of American consumers. If Congress passes another substantial stimulus package, then this could result in more beef purchases as discretionary income inevitably increases… A second major factor will continue to be the export market.”

Friday to Friday Change

Weekly Auction Receipts

 

Oct. 2 Auction Direct

Video/net

Total
 

207,200

(+11,700)

39,700

(+10,000)

4,500

(-37,800)

251,400

(-16,100)

 

 

CME Feeder Index

CME Feeder Index* Oct. 1 Change
  $142.96 +  $0.73

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 2 Change
600-700 lbs. $154.59 +  $2.00
700-800 lbs. $149.49 –   $0.59
800-900 lbs. $145.06 +  $0.70

 

South Central

Steers-Cash Oct. 2 Change
500-600 lbs. $147.81 –  $0.22
600-700 lbs. $143.18 + $0.83
700-800 lbs. $142.24 + $1.20

 

Southeast

Steers-Cash Oct. 2 Change
400-500 lbs. $148.90 –  $0.75
500-600 lbs. $136.40 + $1.30
600-700 lbs. $129.48 –  $1.33

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 2 ($/cwt) Change
Choice $218.88 –  $0.46
Select $207.61 + $0.63
Ch-Se Spread $11.27 –  $1.09

 

Futures

Feeder Cattle  Oct. 2 Change
Oct $139.900 –  $0.425
Nov $139.875 –  $0.275
Jan ’21 $138.000 –  $0.825
Mar $137.425 –  $0.925
Apr $138.900 –  $0.850
May $139.925 –  $0.625
Aug $144.350 –  $0.925
Sep $144.350 –  $0.925

 

Live Cattle   Oct. 2 Change
Oct $108.175 + $0.600
Dec $111.100 – $0.300
Feb ’21 $114.725 + $0.125
Apr $117.150 + $0.625
Jun $110.725 + $0.625
Aug $109.200 + $0.650
Oct $111.400 + $0.550
Dec $114.400 + $0.175
Feb ’22 $116.700 – $0.475

 

Corn  Oct. 2 Change
Dec $3.796 + $0.144
Mar ’21 $3.892 + $0.160
May $3.946 + $0.160
Jly $3.984 + $0.160
Sep $3.882 + $0.096
Oct $3.910 + $0.070

 

Oil CME-WTI Oct. 2 Change
Nov $37.05 –  $3.20
Dec $37.34 –  $3.17
Jan ’21 $37.74 –  $3.07
Feb $38.15 –  $2.98
Mar $38.55 –  $2.90
Apr $38.92 –  $2.82

Equities

Equity Indexes Oct. 2 Change
Dow Industrial Average  27682.81 +  508.85
NASDAQ  11075.02 +  161.46
S&P 500   3348.44 +    49.98
Dollar (DXY)       93.81 –        0.77
October 4th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 25, 2020

Pressure in outside markets for much of the week weighed on commodity futures prices. Despite stronger wholesale beef prices and higher negotiated cash fed cattle trade, Cattle futures weakened, especially Feeder Cattle on prescient queasiness about the monthly Cattle on Feed report (see below).

Feeder Cattle futures closed an average of $2.06 lower week to week on Friday (37¢ lower at the back to $2.82 lower). That was with Corn futures closing an average of 12¢ lower through the front six contracts, week to week.

Nationwide, calves and feeder cattle sold steady to $2/cwt. lower, according to the Agricultural Marketing Service (AMS).

“Supply was moderate as yearlings become harder and harder to find,” AMS analysts explain. “Demand was moderate to good with health records and the amount of flesh playing a big part in how strong demand was for new-crop calves.”

For instance, in his neck of the woods, Andrew P. Griffith, agricultural economist at the University of Tennessee says preconditioned cattle continue to sell $9-$11/cwt. higher than higher risk cattle.

“It is difficult to know how low prices will go this fall. Unfortunately, prices appear to be coming under more pressure than was previously expected,” Griffith says, in his weekly market comments. “It is prudent for producers to consider their forage resources and the opportunity of weaning calves at least 45 days and providing a complete health program. There is generally value in this type program every year, but the profit prospects may be even greater this year than in most. From the stocker perspective, there is an opportunity to purchase low cost calves and profit on the weight gain.”

Feedlot Placements Up 9%

If anything, the monthly USDA Cattle on Feed report issued Friday (feedlots with 1,000 head or more capacity) will likely be viewed as bearish, with 2.06 million head placed in August, which was 173,000 head more (+9.2%) than a year earlier. That’s about 3% more than expectations heading into the report. In terms of weights, 36% went on feed weighing 699 lbs. or less, 48% weighing 700-899 lbs. and 16% weighing 900 lbs. or more.

Marketings in August of 1.89 million head were 61,000 head fewer (-3.1%) than last year, in line with expectations.

Cattle on feed Sept. 1 of 11.39 million head were 412,000 head more (+3.8%) than a year earlier, which was the most for the date since the data series began in 1996.

Fed Cattle Prices Creep Higher

Negotiated cash fed cattle prices ended the week generally $2 higher on a live basis at mostly $105/cwt. in the five-area feeding region, according to the Agricultural Marketing Service. Dressed trade was $1-$2 higher at mostly $165.

Through Thursday, the five-area direct weighted average steer price was $105.03/cwt. on a live basis, which was $1.49 higher than the previous week. The average steer price in the beef was $164.87, which was $1.94 higher.

“…most casual observers would not consider these prices to be highly profitable because of how low they are relative to recent history. However, current prices have many cattle feeders in triple digit profits, because the cattle coming off feed were purchased at extremely low prices during the spring,” Griffith explains. “These profits will not immediately result in higher feeder cattle prices, as many cattle feeders are looking for some reserves. If these profits persist for a little while, then it will eventually result in support for the feeder cattle market, and that may not show up until winter.”

Except for 22¢ higher in spot Oct, Live Cattle futures closed an average of $1.05 lower week to week on Friday, from 20¢ lower to $1.62 lower.

Cattle slaughter of 2.80 million head in August was 4% less year over year. Beef production of 2.33 billion lbs., was 2% less than a year earlier; there was one more weekday in August last year.

“Steer and heifer slaughter remain well below year ago levels with year-to-date heifer slaughter down 3.7% compared to the same weeks in 2019; steer slaughter is 4.9% below year-ago levels,” Griffith says. “Despite the lower slaughter rates, federally inspected beef production year-to-date is only down 1.2% because carcass weights have been well above last year’s carcass weights since the beginning of the year.”

Estimated total cattle slaughter last week was 651,000 head, according to AMS. That was 6,000 head more than the previous week and 1,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 23.51 million head is 1.07 million head fewer (-4.3%) than the same period last year.

Choice Boxed Beef Prices Higher

Wholesale beef value appeared to turn the seasonal corner last week.

Choice boxed beef cutout value was $3.70 higher week to week on Friday at $219.34/cwt. Select was $3.04 higher at $206.98.

Estimated year-to-date beef production of 19.81 billion lbs. is 335.5 million lbs. less (-1.69%) than last year.

“Given strong beef production and relatively strong boxed beef prices, it would appear that beef demand remains strong despite many consumers having reduced incomes during the coronavirus pandemic,” Griffith says.

Friday to Friday Change

Weekly Auction Receipts

 

Sept. 25 Auction Direct

Video/net

Total
 

195,500

(-5,700)

29,700

(-17,000)

42,300

(+2,500)

267,500

(-20,200)

 

 

CME Feeder Index

CME Feeder Index* Sept. 24 Change
  $142.33 +  $1.14

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 15 Change
600-700 lbs. $152.59 –   $0.37
700-800 lbs. $150.08 +  $4.00
800-900 lbs. $144.36 +  $1.30

 

South Central

Steers-Cash Sept. 25 Change
500-600 lbs. $148.03 –  $1.65
600-700 lbs. $142.35 –  $1.80
700-800 lbs. $141.04 –  $0.34

 

Southeast

Steers-Cash Sept. 25 Change
400-500 lbs. $149.65 + $0.31
500-600 lbs. $135.10 –  $4.63
600-700 lbs. $130.81 –  $0.24

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 25 ($/cwt) Change
Choice $219.34 + $3.70
Select $206.98 + $3.04
Ch-Se Spread $12.36 + $0.66

 

Futures

Feeder Cattle  Sept. 25 Change
Oct $140.325 –  $2.100
Nov $140.150 –  $2.375
Jan ’21 $138.525 –  $2.825
Mar $138.350 –  $2.600
Apr $139.750 –  $2.325
May $140.550 –  $1.850
Aug $145.275 –  $0.375
Sep $145.275 n/a

 

Live Cattle   Sept. 25 Change
Oct $107.575 + $0.225
Dec $111.400 – $0.450
Feb ’21 $114.600 – $1.475
Apr $116.525 – $1.625
Jun $110.100 – $1.500
Aug $108.550 – $1.325
Oct $110.850 – $1.000
Dec $114.225 – $0.825
Oct $117.175 – $0.200

 

Corn  Sept. 25 Change
Dec $3.652 –  $0.132
Mar ’21 $3.732 –  $0.142
May $3.786 –  $0.140
Jly $3.824 –  $0.130
Sep $3.786 –  $0.096
Oct $3.840 –  $0.092

 

Oil CME-WTI Sept. 25 Change
Nov $40.25 –  $1.07
Dec $40.51 –  $1.10
Jan ’21 $40.81 –  $1.12
Feb $41.13 –  $1.11
Mar $41.45 –  $1.09
Apr $41.74 –  $1.07

Equities

Equity Indexes Sept. 25 Change
Dow Industrial Average  27173.96 –  483.46
NASDAQ  10913.56 +  120.28
S&P 500   3298.46 –     21.01
Dollar (DXY)       94.58 +       1.58
September 27th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 18, 2020

Calf and feeder cattle prices diverged last week as wide temperature swings become the seasonal norm, adding cattle stress.

“Calves are split into two groups: the long-time weaned calves with vaccination programs selling mostly steady to firm with some sales up to $5/cwt. higher,” explain analysts with the Agricultural Marketing Service (AMS). “The other side of the coin are the un-weaned calves, fleshy bawlers in many cases, reported trading $3-$8 lower or with a sharply lower undertone. Discounts on these un-weaned calves will more than likely increase as we head into fall or until we get a good hard freeze.”

“Calf prices seasonally soften in the fall with the calf run, but the feeder cattle market has done very little to support calf prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Based on Tennessee weekly auction price averages, a 525-lb. steer was worth $727 per head while the same weight heifer was worth $643 per head this week. These are not highly profitable prices that make a producer want to purchase bred heifers or keep back more heifers for breeding. Nor are these prices low enough to result in cow culling, because a 525-lb. steer this time last year was valued about $20 less than this week’s price and few producers culled very hard a year ago.”

Long yearlings coming off grass continued to command the most buyer attention, according to AMS, selling steady to $5 higher at mostly 850-1,000 lbs., with instances of $8 higher.

Feeder Cattle futures closed an average of $1.53 higher week to week on Friday (15¢ higher at the back to $2.25 higher).

Looking further ahead, USDA’s Economic Research Service (ERS) left projected feeder cattle prices unchanged from the previous month—Livestock, Dairy and Poultry Outlook (LDPO)–as higher feed costs and the slower expected pace of marketing outweigh declining supplies.

The average feeder steer price (basis Oklahoma City) is projected at $140/cwt. in the third and fourth quarters for an annual average of $135.70. The projected feeder steer price is $131 for the first quarter of next year, $134 for the second quarter and at $137 for the 2021 average.

“The result of greater placements in second-half 2020 without increased marketings in the second half will likely keep cattle in feedlots above year-ago levels through the remainder of 2020,” say ERS analysts. “Because of this, anticipated feeder cattle supplies will diminish in 2021. However, the increase in fed cattle prices will likely offset higher corn prices forecast for next year.”

Week to week on Friday, Corn futures closed an average of 7¢ higher through the front six contracts. That’s an average of 18¢ higher in the last two weeks.

Fed Cattle Prices Increase

Negotiated cash fed cattle trade ended the week $4-$5 higher on a dressed basis in Nebraska at $165/cwt. and $2-$3 higher in the western Corn Belt at $163. On a live basis, prices were $1.50-$2.00 higher in the Southern Plains at $103.00-$103.50, $2.50 higher in Nebraska at $103.50 and $2-$4 higher in the western Corn Belt at $104-$105.

Live Cattle futures closed an average of $1.47 higher week to week on Friday ($1.15 to $1.95 higher).

“Cattle feeders will be looking for the finished cattle market to slowly gain some steam heading toward the holiday marketing timeframe, but this will be a slow process, as prices are expected to be stagnant the next couple of weeks,” Griffith says.

For broader perspective, in the latest LDPO, ERS projects the average five-area direct Choice fed steer price at $101/cwt. for the third quarter, $104 for the fourth quarter and at $107.30 for the annual average, the same as the previous month.

“The reduction in slaughter capacity in the second quarter continues to show up in the year-over-year higher number of cattle on feed over 150 days (although diminishing since June) and in the carcass weights of steers and heifers,” say ERS analysts. “The improved pace of slaughter, combined with an ample supply of fed cattle at heavier weights, led to higher expected beef production in third-quarter 2020 relative to 2019, which is likely putting pressure on cattle prices.”

Heading into 2021, however, ERS forecast average Choice steer prices $2 higher than the previous month’s estimate at $107 in the first and second quarters with an annual average price of $112.

That’s based on expectations that a larger proportion of available feeder cattle supplies available July 1 were placed on feed, which will limit supplies available for placement in the first half of next year.

“This pulls feedlot marketings, and consequently steer and heifer slaughter, forward from the latter quarters of 2021,” say ERS analysts. “With fewer steers and heifers in the slaughter mix and higher forecast feed costs affecting the length of time on feed, carcass weight gains next year will be limited.”

In the meantime, wholesale beef values continued their seasonal decline.

Choice boxed beef cutout value was $4.25 lower week to week on Friday at $215.64/cwt. Select was $3.16 lower at $203.94.

“The main determinant of how fed cattle prices move will be associated with consumers’ willingness to pay for beef moving forward,” Griffith explains. “Has the pandemic changed consumption patterns? It is doubtful that it has, but discretionary spending may continue to be altered.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Sept. 18 Auction Direct

Video/net

Total
 

201,200

(+81,400)

46,700

(+22,700)

39,800

(+28,400)

287,700

(+75,700)

 

 

CME Feeder Index

CME Feeder Index* Sept. 17 Change
  $142.19 +  $1.20

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 18 Change
600-700 lbs. $152.96 –   $1.60
700-800 lbs. $146.08 –   $1.59
800-900 lbs. $143.06 +  $0.73

 

South Central

Steers-Cash Sept. 18 Change
500-600 lbs. $149.68 + $0.96
600-700 lbs. $144.15 + $1.77
700-800 lbs. $141.35 + $3.62

 

Southeast

Steers-Cash Sept. 18 Change
400-500 lbs. $149.34 + $0.61
500-600 lbs. $139.73 + $2.94
600-700 lbs. $131.05 –  $2.53

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 18 ($/cwt) Change
Choice $215.64 –  $4.25
Select $203.94 –  $3.16
Ch-Se Spread $11.70 –  $1.09

 

Futures

Feeder Cattle  Sept. 18 Change
Sep $140.875 + $0.875
Oct $142.425 + $1.850
Nov $142.525 + $1.200
Jan ’21 $141.350 + $2.225
Mar $140.950 + $2.250
Apr $142.075 + $1.975
May $142.400 + $1.725
Aug $145.650 + $0.150

 

Live Cattle   Sept. 18 Change
Oct $107.350 + $1.825
Dec $111.850 + $1.950
Feb ’21 $116.675 + $1.750
Apr $118.150 + $1.200
Jun $111.600 + $1.175
Aug $109.875 + $1.250
Oct $111.850 + $1.175
Dec $115.050 + $1.150
Oct $117.375 + $1.750

 

Corn  Sept. 18 Change
Dec $3.784 + $0.100
Mar ’21 $3.874 + $0.092
May $3.926 + $0.082
Jly $3.954 + $0.074
Sep $3.882 + $0.040
Oct $3.932 + $0.036

 

Oil CME-WTI Sept. 18 Change
Oct $41.11 + $3.78
Nov $41.32 + $3.67
Dec $41.61 + $3.53
Jan ’21 $41.93 + $3.37
Feb $42.24 + $3.22
Mar $42.54 + $3.09

 

Equities

Equity Indexes Sept. 18 Change
Dow Industrial Average  27657.42 –     8.22
NASDAQ  10793.28 –   60.26
S&P 500   3319.47 –    21.50
Dollar (DXY)       93.00 –     0.27
September 20th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 11, 2020

Nationwide, steers and heifers sold from $2/cwt. lower to $2 higher during the holiday-shortened week, according to the Agricultural Marketing Service (AMS).

“Bunched-up yearlings that have been on summer grazing programs and forced off grass due to drought, especially in the Western regions of the U.S., have dampened feeder cattle prices (e.g., 700-to 800-pound steers). That may spill back into the calf market (e.g., 500-to 600-pound steers),” say analysts with the Livestock Marketing Information Center (LMIC), in the most recent Livestock Monitor.

As for calves, Andrew P. Griffith, agricultural economist at the University of Tennessee points out both the increased volume of fresh-weaned calves and the associated health risk will likely pressure prices.

“The large temperature swings that are typical of late September and October tend to result in increased health issues with highly stressed animals, which means buyers are not willing to bid those animals higher,” Griffith explains, in his weekly market comments.“This means there is likely value in weaning and preconditioning the spring calf crop before marketing them.” He notes Tennessee prices last week suggested an $8-$10/cwt. advantage for weaned calves versus non-weaned peers. Weight gain and cost of gain during weaning and preconditioning typically determine whether that price difference offers producers opportunity.

Cattle futures gained week to week, with support from resurgent Lean Hog futures, which climbed higher after a wild boar carcass in Germany tested positive for African Swine Fever, prompting South Korea to ban German pork imports.

Feeder Cattle futures closed an average of $1.63 higher week to week on Friday (97¢ to $2.35 higher).

Fed Cattle Prices Weaker

Negotiated cash fed cattle prices were mainly $2-$3 lower on a live basis at $101/cwt. in the Southern Plains ($102 in the Texas Panhandle Friday) and Nebraska and at $100-$101 in the western Corn Belt, according to the Agricultural Marketing Service. Dressed trade was $2-3 lower at $160-$161.

“The market has the potential to move as high as $115/cwt., but it will take a few months to get there,” Griffith says.

USDA’s Economic Research Service (ERS) pegged the average fed steer price (five-area direct) at $101/cwt. on a live basis for the third quarter this year, followed by an average of $104 in the fourth quarter and $107 in the first quarter of 2021. In the latest World Agricultural Supply and Demand Estimates (WASDE), ERS increased the forecast annual price next year by $2 to $112.

The monthly five-area direct weighted average fed steer price in August was $104.60/cwt., which was $8.03 higher than the previous month, but $4.78 lower than the same time last year. The average dressed steer price of $167.82 was $10.50 higher than the previous month, but $7.24 less than the previous year.

Live Cattle futures closed an average of $1.47 higher week to week on Friday (37¢ higher at the back to $1.97 higher).

Futures gains came in the face of the outlook for stronger grain prices (see below).

Wholesale Beef Prices Soften

Wholesale beef values continued their seasonal decline last week.

Choice boxed beef cutout value was $5.96 lower week to week on Friday at $219.89/cwt. Select was $2.20 lower at $207.10.

“Boxed beef prices will not find much support until end-of-the-year holiday purchasing begins,” Griffith says. “The seasonal pressure in the beef market is not expected to influence cattle prices as negatively as is typical due to the strong margins already present in the beef packing industry.”

Estimated total cattle slaughter for the holiday-shortened week ending Sept. 12 was 59,000 head fewer than the previous week at 574,000; 62,000 head fewer than the same week last year. USDA estimates year-to-date cattle slaughter at 22.2 million head, which is 1.06 million head fewer (-4.6%) than a year earlier. Estimated beef production for the week of 479.7 million lbs. was 47.6 million lbs. less than the prior week. Year-to-date beef production of 18.37 billion lbs. is 356.6 million lbs. less (-1.9%) than the same time last year.

Net beef export sales of 15,500 metric tons (2020) for the week ending Sept. 3 were 37% more than the previous week and 14% more than the prior four-week average, according to the weekly U.S. Export Sales report from USDA’s Foreign Agricultural Service. Increases were primarily for South Korea, Japan, Mexico, China and Hong Kong.

Grain Prices Strengthen

Improving exports added support to corn and soybean prices in recent weeks. Those prices likely will receive even more support from the latest Crop Production report from the National Agricultural Statistics Service (NASS).

Corn production for grain was projected 2% less at 14.9 billion bu. That’s 378 million bu. less than the previous estimate, based on reducing harvested corn acres by 550,000 acres, due to the late-summer derecho. Estimated production would still be 9% more than last year.

Although 3.3 bu./acre less than the previous moth’s projection, forecast yield of 178.5 bu./harvested acre would be record large and 11.1 bu./acre more than last year. That’s based on conditions as of Sept. 1

With a smaller crop more than offsetting increased beginning stocks–mostly due to lower estimated exports for 2019-20–the September WASDE reduced projected ending stocks by 253 million bu. and increased the season-average corn price by 40¢ to $3.50/bu.

As for soybeans, production for beans is forecast at 4.31 billion bu., down 3% from the previous forecast, but up 21% percent from last year, according to the Crop Production report. Expected average yield is a record high 51.9 bu./harvested acre, down 1.4 bu. from the previous forecast but 4.5 bu. more than in 2019. Area harvested for beans in the United States is forecast at 83.0 million acres, unchanged from the previous forecast and 11% more than last year.

WASDE forecasts the U.S. season-average soybean price at $9.25/bu., up 90¢ cents from last month. The soybean meal price is projected at $315 per short ton, up $25 dollars. The soybean oil price forecast is 32.0¢/lb., up 2¢.

 

Friday to Friday Change

Weekly Auction Receipts

 

Sept. 11 Auction Direct

Video/net

Total
 

119,800

(-41,000)

24,000

(-3,900)

68,200

(+63,000)

212,000

(+18,100)

 

 

CME Feeder Index

CME Feeder Index* Sept. 10 Change
  $140.99 +  $0.79

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 11 Change
600-700 lbs. $154.56 +  $1.32
700-800 lbs. $147.67 +  $0.40
800-900 lbs. $142.33 +  $0.65

 

South Central

Steers-Cash Sept. 11 Change
500-600 lbs. $148.72 –  $2.19
600-700 lbs. $142.38 –  $4.04
700-800 lbs. $137.73 –  $1.97

 

Southeast

Steers-Cash Sept. 11 Change
400-500 lbs. $148.73 –  $0.04
500-600 lbs. $136.79 –  $0.81
600-700 lbs. $133.58 + $2.36

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 11 ($/cwt) Change
Choice $219.89 –  $5.96
Select $207.10 –  $2.20
Ch-Se Spread $12.79 –  $3.76

 

Futures

Feeder Cattle  Sept. 11 Change
Sep $140.000 + $2.350
Oct $140.575 + $2.075
Nov $141.325 + $1.800
Jan ’21 $139.125 + $1.050
Mar $138.700 + $0.975
Apr $140.100 + $1.125
May $140.675 + $1.275
Aug $145.500 + $2.350

 

Live Cattle   Sept. 11 Change
Oct $105.525 + $1.075
Dec $109.900 + $1.425
Feb ’21 $114.325 + $1.875
Apr $116.950 + $1.825
Jun $110.425 + $1.975
Aug $108.625 + $1.700
Oct $110.675 + $1.675
Dec $113.900 + $1.300
Oct $115.625 + $0.375

 

Corn  Sept. 11 Change
Sep $3.650 + $0.078
Dec $3.684 + $0.104
Mar ’21 $3.782 + $0.098
May $3.844 + $0.098
Jly $3.880 + $0.088
Sep $3.842 + $0.070

 

Oil CME-WTI Sept. 11 Change
Oct $37.33 –  $2.44
Nov $37.65 –  $2.50
Dec $38.08 –  $2.51
Jan ’21 $38.56 –  $2.46
Feb $39.02 –  $2.42
Mar $39.45 –  $2.38

 

Equities

Equity Indexes Sept. 11 Change
Dow Industrial Average  27665.64 –   467.67
NASDAQ  10853.54 –   459.59
S&P 500   3340.97 –      85.99
Dollar (DXY)       93.27 +       0.30
September 13th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 4, 2020

Softer cash fed cattle prices, seasonally weakening wholesale beef values and a break in equity markets later in the week all added bearishness to Cattle futures for most of the week. Calves and feeder cattle traded mixed but followed suit overall.

Steers and heifers sold $1-$5/cwt. lower, according to the Agricultural Marketing Service (AMS).

Except for $1.55 higher in Aug, Feeder Cattle futures closed an average of $1.05 lower week to week on Friday (40¢ lower at the back to $2.37 lower in spot Sep).

“It is evident the calf and feeder cattle market has softened the past couple of weeks which seems rather early,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The summer feeder cattle market generally holds strength into the middle of September while the calf market does not begin to come under severe pressure until October. However, factors beyond the control of cattle producers are putting pressure on the market.”

Drought is part of the story. Griffith points out some form of drought covers more than 85% of the Western United States; severe drought or worse over 50% of the region. Similarly, he says drought covers 77% of the High Plains; severe or worse in 31% of the region.

“The dry conditions led to many producers marketing calves early this year, whether that be from summer grazing programs or having to wean calves early,” Griffith explains. “The evidence of these animals moving early was seen in the August cattle on feed report. July placements were up 11% compared to last year with most of that increase coming from the lighter weight categories.”

Recently updated five-year price projections from the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri peg feeder steer prices (600-650 lbs., Oklahoma City) for this year at $144.46/cwt., $150.54 next year and rising to $179.03 in 2025.

Fed Cattle Prices Droop

Negotiated cash fed cattle prices were $2-$3 less than the previous week in the Southern Plains and Nebraska at $102-$103/cwt. Live trade was steady to $3 lower in the western Corn Belt at $103-$104. Dressed sales were $3-$5 lower at $162-$164.

Through Thursday, the average five-area direct weighted average fed steer price was $103.18/cwt. on a live basis, which was $1.94 less than the previous week. The average dressed steer price of $163.11 was $3.41 less than the previous week.

“Late summer and early fall are consistently a tough time period for cattle exiting the feedlot, as beef demand softens and so does demand for finished cattle,” Griffith says. “This soft demand will persist for several weeks, but it is hard to imagine cattle prices re-testing the lows they have already experienced earlier in the summer. The one thing that should support finished cattle prices is the hole that was created by reduced placements into feedlots during March and April. Many of the animals that would have been placed in March and April would be coming off feed now, but the delay in placing those cattle should result in fewer cattle being marketed the next several weeks.”

Live Cattle futures closed mixed, from an average of 26¢ lower to an average of 68¢ higher week to week on Friday.

Estimated cattle slaughter for the week ending Sept. 5 was 633,000 head, which was 21,000 head fewer than the previous week but 62,000 head more than the same week a year earlier. Beef production for the week of 527.3 million lbs. was 17.3 million lbs. less than the previous week.

FAPRI projects the five-area direct average fed steer price at $113.15/cwt. next year, compared to an estimated $109.84 this year. After 2021, projected prices increase steadily from $119.94 in 2022 to $130.91 in 2025.

Year to date, estimated total cattle slaughter of 21.63 million head is 998,000 head fewer (-4.4%) than the same time last year. Beef production year to date of 17.89 billion lbs. is 320.6 million lbs. less (-1.8%) than the same time last year.

Wholesale Beef Values Decline

Choice boxed beef cutout value was $3.55 lower week to week on Friday at $225.85/cwt. Select was $5.56 lower at $209.30.

“Given that Labor Day purchases are behind the market, wholesale beef prices are remaining fairly strong,” Griffith says. “The lower fed cattle prices and the strong boxed beef prices are continuing to offer strong margins for packers who still hold most of the leverage in the marketplace. The expectation is for beef prices to start softening as summer ends and fall begins, but that has not been the case thus far.”

According to Griffith, loin and rib prices continue on par with a year a year earlier, as do prices for most end cuts.

“The trim market is the one running into some weakness, as 50% lean beef is down more than 50% compared to year-ago prices,” Griffith says. “This is somewhat surprising, given that the ground beef market has been on a tear through the pandemic and that 90% lean beef is at year-ago price levels. The expectation is for beef to soften moving through September and October, but softening prices will not take all the profits out of the business.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Sept. 4 Auction Direct

Video/net

Total
 

160,800

(+4,600)

27,900

(-10,800)

5,200

(-275,100)

193,900

(-281,300)

 

 

CME Feeder Index

CME Feeder Index* Sept. 3 Change
  $140.20 –   $1.36

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 4 Change
600-700 lbs. $153.24 –   $5.32
700-800 lbs. $147.27 +  $0.28
800-900 lbs. $141.68 –   $1.12

 

South Central

Steers-Cash Sept. 4 Change
500-600 lbs. $150.91 –  $2.89
600-700 lbs. $146.42 –  $5.64
700-800 lbs. $139.70 –  $0.78

 

Southeast

Steers-Cash Sept. 4 Change
400-500 lbs. $148.77 –  $1.46
500-600 lbs. $137.60 –  $4.17
600-700 lbs. $131.22 –  $2.88

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 4 ($/cwt) Change
Choice $225.85 –  $3.55
Select $209.30 –  $5.56
Ch-Se Spread $16.55 + $2.01

 

Futures

Feeder Cattle  Sept. 4 Change
Sep $137.650 –  $2.375
Oct $138.500 –  $1.675
Nov $139.525 –  $1.075
Jan ’21 $138.075 –  $0.575
Mar $137.725 –  $0.500
Apr $138.975 –  $0.400
May $139.400 –  $0.725
Aug $143.150 + $1.550

 

Live Cattle   Sept. 4 Change
Oct $104.450 –  $0.450
Dec $108.475 –  $0.025
Feb ’21 $112.450 + $0.600
Apr $115.125 + $1.025
Jun $108.450 + $0.700
Aug $106.925 + $0.400
Oct $109.000 -0-
Dec $112.600 –  $0.300
Oct $115.250 n/a

 

Corn  Sept. 4 Change
Sep $3.472 + $0.012
Dec $3.580 –  $0.012
Mar ’21 $3.684 –  $0.008
May $3.746 –  $0.010
Jly $3.792 –  $0.002
Sep $3.772 + $0.002

 

Oil CME-WTI Sept. 4 Change
Oct $39.77 –  $3.20
Nov $40.15 –  $3.14
Dec $40.59 –  $3.03
Jan ’21 $41.02 –  $2.92
Feb $41.44 –  $2.80
Mar $41.83 –  $2.68

 

Equities

Equity Indexes Sept. 4 Change
Dow Industrial Average  28133.31 –   520.56
NASDAQ  11313.13 –   382.50
S&P 500   3426.96 –      81.05
Dollar (DXY)       92.97 +       0.67
September 5th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Aug. 28, 2020

More feedlot placements in July than expected and expectations for wholesale beef values to decline seasonally set the stage for lower Cattle futures last week, pressuring cash fed cattle prices, as well as calves and feeders.

Nationwide, steers and heifers sold steady to $4/cwt. lower, according to the Agricultural Marketing Service (AMS).

Feeder Cattle futures closed an average of $4.34 lower week to week on Friday ($3.07 lower at the back to $5.10 lower toward the front).

“The feeder cattle market has been on a tear since the second week of April, when the market lows were set during the peak of the coronavirus pandemic,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Since April, the fall feeder cattle futures contracts have increased about $30/cwt. to their recent highs. However, the market has taken a little breather the past couple of weeks as Feeder Cattle futures prices lost approximately $6. This price movement provides some semblance of normalcy as it relates to supply and demand of feeder cattle. It would appear the market is attempting to find the longer-term supply and demand of feeder cattle compared to the short-run shocks that seem to have become so common the past year.”

Given seasonal pressure and what appear to be ample calves and feeder cattle, Griffith says it will be difficult for prices to climb beyond their recent peak for the remainder of the year.

The outlook for grain prices also applied pressure to calves and feeder cattle.

“Grain markets found support with dry weather providing the majority of the strength to the market,” AMS analysts explain. “Soybean markets were especially strong with traders growing concerned about the dry conditions across Nebraska, Iowa, and parts of Illinois. December corn retraced up to the highest prices seen in a month and a half.” 

Week to week on Friday, Corn futures closed an average of 15¢ higher through the front six contracts. Soybean futures closed an average of 43¢ higher through the front six contracts.

Fed Cattle Prices Soften

Negotiated cash fed cattle prices ended the week $1 lower in the Southern Plains at $105/cwt. on a live basis, $1.50 lower in Nebraska at $105 and $2 lower in the western Corn Belt at $104-$107. Dressed trade was $2-$3 lower at mostly $167.

Through Thursday, the five-area direct weighted average steer price was $105.12/cwt. on a live basis, which was $1.50 lower than the previous week. The weighted average dressed steer price of $166.52 was $2.59 less.

Live Cattle futures closed an average of $2.38 lower week to week on Friday ($1.35 lower at the back to $3.65 lower toward the front).

“Prices in the fed cattle market will be under pressure during September and October before demand for beef begins to pick back up leading into end of the year holidays,” Griffith says. “…the market will be steady to soft compared to simply declining in late summer and moving into the fall months. The market is not expected to go back below $100 and should be well supported at $102-$103.”

On the up side, Derrell Peel, Extension livestock marketing specialist at Oklahoma state University notes data and anecdotal indications suggest the backlog of fed cattle is rapidly diminishing and may be nearly erased. 

“Going forward, the 1 million head decrease in feedlot placements in February, March and April suggests that front-end feedlot supplies will be relatively tight at least through September,” Peel explained, in his early-week market comments.

Wholesale Values Plateau

Wholesale beef values appeared to reach their pre-Labor Day zenith, with support from post-holiday re-stocking.

Choice boxed beef cutout value was $3.46 higher week to week on Friday at $229.40/cwt. Select was $5.87 higher at $214.86.

Estimated total cattle slaughter for the week ending Aug. 29 of 654,000 head was 2,000 more than the previous week’s estimate and 1,000 head more than the same time a year earlier. Year-to-date cattle slaughter is estimated at 20.99 million head, which would be 1.06 million fewer (-4.80%) than the same time last year. Estimated beef production so far this year is 17.36 billion lbs., which is 381.2 million lbs. less (-2.1%) than last year.

Friday to Friday Change

Weekly Auction Receipts

 

Aug. 28 Auction Direct

Video/net

Total
 

156,200

(+4,200)

38,700

(-119,300)

280,300

(+192,900)

475,200

(+69,300)

 

 

CME Feeder Index

CME Feeder Index* Aug. 27 Change
  $141.56 –   $2.34

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 28 Change
600-700 lbs. $158.56 +  $1.08
700-800 lbs. $146.99 –   $3.88
800-900 lbs. $142.80 –   $2.20

 

South Central

Steers-Cash Aug. 28 Change
500-600 lbs. $153.80 –  $2.86
600-700 lbs. $152.06 + $0.36
700-800 lbs. $140.48 –  $4.32

 

Southeast

Steers-Cash Aug. 28 Change
400-500 lbs. $150.23 –  $1.39
500-600 lbs. $141.77 + $1.10
600-700 lbs. $134.10 –  $0.50

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 28 ($/cwt) Change
Choice $229.40 + $3.46
Select $214.86 + $5.87
Ch-Se Spread $14.54 –  $2.41

 

Futures

Feeder Cattle  Aug. 28 Change
Sep $140.025 –  $4.825
Oct $140.175 –  $5.100
Nov $140.600 –  $4.900
Jan ’21 $138.650 –  $4.775
Mar $138.225 –  $4.025
Apr $139.375 –  $3.700
May $140.125 –  $3.075
Aug $141.600 n/a

 

Live Cattle   Aug. 28 Change
Aug $103.225 –  $2.575
Oct $104.900 –  $3.650
Dec $108.500 –  $3.275
Feb ’21 $111.850 –  $2.775
Apr $114.100 –  $2.350
Jun $107.750 –  $2.075
Aug $106.525 –  $1.850
Oct $109.000 –  $1.550
Dec $112.900 –  $0.350

 

Corn  Aug. 28 Change
Sep $3.460 + $0.190
Dec $3.592 + $0.188
Mar ’21 $3.692 + $0.162
May $3.756 + $0.152
Jly $3.794 + $0.140
Sep $3.770 + $0.098

 

Oil CME-WTI Aug. 28 Change
Oct $42.97 + $0.63
Nov $43.29 + $0.67
Dec $43.62 + $0.69
Jan ’21 $43.94 + $0.71
Feb $44.24 + $0.73
Mar $44.51 + $0.74

 

Equities

Equity Indexes Aug. 28 Change
Dow Industrial Average  28653.87 +  723.54
NASDAQ  11695.63 +  383.83
S&P 500   3508.01 +   110.85
Dollar (DXY)       92.30 –       0.90
August 30th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Aug. 21, 2020

Firm to higher negotiated cash fed cattle prices and blooming wholesale beef values continued to support calf and feeder cattle markets last week.

Steers and heifers sold from $1 lower to $2/cwt. higher, according to the Agricultural Marketing Service (AMS), with continued strong demand for yearlings and spring calves making their first seasonal appearance at auctions.

“There are still plenty of yearlings on offer at sales this year due to the elongation of the marketing period as producers were more inclined to wait to sell after the spring’s auction price decline,” say AMS analysts. “Breakevens on fed cattle coming out of feedyards at today’s prices are tempting producers to make another turn on feeding those yearlings.” 

Feeder Cattle futures closed an average of $1.56 lower week to week on Friday (80¢ lower at the back to $2.32 lower).

“The summer and fall feeder cattle futures contracts have been trading above the $140/cwt. mark since the middle of July with only a few instances of prices being below that level. This price level has provided some stability to the market and has provided cattle producers an opportunity to either market cattle at favorable prices or use a price risk management strategy to hedge a strong price for a future sell,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The stronger feeder cattle prices have helped support the calf market as well.”

Feedlot Placements Up 11%

Placements in feedlots (feedlots with 1,000 head or more capacity) during July of 1.89 million head were 188,000 more (+11.03%) than a year earlier, according to the monthly Cattle on Feed report. That was significantly more than pre-report expectations of a 6% increase. In terms of placement weight, 38.83% went on feed weighing less than 699 lbs., 47.17% went on feed weighing 700-899 lbs. and 14.0% weighed more than 900 lbs.

Marketings in July of 1.99 million head were 12,000 head fewer than last year (-0.60%), about in line with average analyst estimates ahead of the report.

Total cattle on feed Aug. 1 numbered 11.28 million head, which was 172,000 head more (+1.5%) than the same time a year earlier, a little more than expectations and the largest inventory for the month since the data series began in 1996.

Fed Cattle Steady to Higher

Based on reports from the Agricultural Marketing Service, negotiated cash fed cattle prices ended the week $2 higher in the Southern Plains at $106/cwt. on a live basis, steady to 50¢higher in the Northern Plains at $106.00-$106.50 and $2 higher in the western Corn Belt at $107-$109. Dressed trade was unevenly steady at $169.

Through Thursday, the five-area direct weighted average steer price was $106.62/cwt. on a live basis, which was $2.13 more than the previous week and $2.19 less than the same time last year, keeping in mind the market was dealing with the aftermath of the Tyson plant fire in 2019. The dressed steer price of $169.11 was $1.05 higher than the prior week, but $5.91 less the same time a year earlier.

“The difference in price between the Northern and Southern Plains has been advantageous for packers in the North to procure cattle in the South and truck them a distance,” AMS analysts explain. “Typically, cattle in the South would not be grading as well as they are now, due to a lengthened feeding period.”

Live Cattle futures closed an average of $1.32 lower week to week on Friday (55¢ lower at the back to $1.80 lower in spot Aug).

Wholesale beef values continued higher, receiving lift from retail buying ahead of Labor Day.

Choice boxed beef cutout value was $11.70 higher week to week on Friday at $225.94/cwt. Select was $9.70 higher at $208.99.

“From January through the first week of April (14 weeks), Federally Inspected (FI) beef production was 6.6% higher than the same time period in 2019. The next nine weeks had year-over-year declines in beef production to the tune of 17.9%. Each of the past 10 weeks has had year-over-year increases in beef production with a total increase of 1.8% over that time period. This resulted in 2020 beef production being down 1.7% year to date,” Griffith says.

Total estimated cattle slaughter for the week ending Aug. 22 was 652,000 head, according to USDA. That was 8,000 head more than the previous week’s estimate, but 17,000 head fewer than the same week last year. Estimated beef production for the week of 542.9 million lbs. was 10.5 million lbs. more than the previous week and 7 million lbs. more than the prior year.

Total cattle slaughter of 632,968 head was 3,336 head fewer than the prior week and 13,735 fewer than the same time last year.

The average dressed steer weight of 906 lbs. was 1 lb. heavier than the previous week and 28 lbs. heavier than a year earlier. The average dressed heifer weight of 832 lbs. was 4 lbs. heavier than the previous week and 26 lbs. heavier than the prior year.

CME to Expand Price Limits

CME Group announced proposed changes to daily and expanded daily price limits for Live Cattle and Feeder Cattle futures. Pending approval by the Commodity Futures Trading Commission, daily price limits for Feeder Cattle will increase to $5/cwt. from $4.50; expanded daily price limits will increase to $7.50, from the current $6.75. For Live Cattle, the daily limit will increase to $4/cwt. from $3; the expanded limit will become $6, compared to the current $4.50. Changes are scheduled to begin Oct. 5.

Friday to Friday Change

Weekly Auction Receipts

 

Aug. 21 Auction Direct

Video/net

Total
 

160,400

(+2,300)

51,500

(-15,000)

71,200

(+64,200)

238,100

(+51,500)

 

 

CME Feeder Index

CME Feeder Index* Aug. 20 Change
  $143.90 +  $1.65

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 21 Change
600-700 lbs. $157.48 –   $3.13
700-800 lbs. $150.87 +  $0.84
800-900 lbs. $145.00 +  $0.92

 

South Central

Steers-Cash Aug. 21 Change
500-600 lbs. $156.66 –  $0.72
600-700 lbs. $151.70 + $1.67
700-800 lbs. $144.80 + $1.40

 

Southeast

Steers-Cash Aug. 21 Change
400-500 lbs. $151.62 + $1.01
500-600 lbs. $140.67 + $0.59
600-700 lbs. $134.60 –  $1.88

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 21 ($/cwt) Change
Choice $225.94 + $11.70
Select $208.99 + $9.70
Ch-Se Spread $16.95 + $2.00

 

Futures

Feeder Cattle  Aug. 21 Change
Aug $142.925 –  $1.000
Sep $144.850 –  $1.725
Oct $145.275 –  $2.150
Nov $145.500 –  $2.325
Jan ’21 $143.425 –  $1.800
Mar $142.250 –  $1.625
Apr $143.075 –  $1.100
May $143.200 –  $0.800

 

Live Cattle   Aug. 21 Change
Aug $105.800 –  $1.800
Oct $108.550 –  $1.675
Dec $111.775 –  $1.050
Feb ’21 $114.625 –  $1.225
Apr $116.450 –  $1.350
Jun $109.825 –  $1.475
Aug $108.375 –  $1.525
Oct $110.550 –  $1.275
Dec $114.250 –  $0.550

 

Corn  Aug. 21 Change
Sep $3.270 + $0.026
Dec $3.404 + $0.024
Mar ’21 $3.530 + $0.038
May $3.604 + $0.038
Jly $3.654 + $0.030
Sep $3.672 + $0.022

 

Oil CME-WTI Aug. 21 Change
Oct $42.34 + $0.03
Nov $42.62 –  $0.05
Dec $42.93 –  $0.07
Jan ’21 $43.23 –  $0.07
Feb $43.51 –  $0.07
Mar $43.77 –  $0.07

Equities

Equity Indexes Aug. 21 Change
Dow Industrial Average  27930.33 –       0.69
NASDAQ  11311.80 +  292.50
S&P 500   3397.16 +     24.31
Dollar (DXY)       93.20 +       0.10
August 22nd, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Aug. 14, 2020

Resurgent wholesale beef values and stronger negotiated cash fed cattle prices continued to support market optimism last week.

Nationwide, calves and feeders traded from $1/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). Those analysts note that many of the receipts in the Northern Plains were coming off summer grass, with the yearlings reported in excellent condition. 

Feeder Cattle futures closed an average of 96¢ higher week to week on Friday (27¢ higher at the back to $1.45 higher toward the front).

“Feeder cattle prices are fairly strong right now. It does not hurt to market cattle earlier than normal if a profit can be achieved, and current prices appear profitable,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in is weekly market comments. “The markets to be wary of are the calf market and the slaughter cow market. The prices for both lighter-weight calves and slaughter cows are expected to come under pressure the next few months. Prices for both classes of animals have held up well thus far, but seasonal trends will likely pressure both of them as more of these classes make their way to the market. There may be some advantages for some producers to early wean calves and market their cull slaughter cows in the near term instead of waiting until October or November.”

Nearer-term, last week’s devastating derecho—a widespread, long-lasting, straight-line wind storm—that swept across the Midwest could add pressure to calf prices from the corn side of the equation.

For instance, based on MODIS satellite imagery and Storm Prediction Center preliminary storm reports, the Iowa Department of Agriculture and Land Stewardship believes 36 counties in Iowa were hardest hit by the derecho. Within those 36 counties, the storm likely had the greatest impact on 3.57 million acres of corn and 2.5 million acres of soybeans.

Corn futures were an average of 15¢ higher through the front six contracts, week to week on Friday, recovering a little more than what was lost the previous two weeks. Part of the that was the derecho and weather outlook and part was due to ending corn stocks in the World Agricultural Supply and Demand Estimates (WASDE) coming in lower than the trade expected.

Fed Cattle Prices Up Again

Negotiated cash fed cattle prices last week were mostly $4 higher on a live basis in the Southern Plains at $104/cwt., $3 higher in the Northern Plains at $106 and $2.50-$4.00 higher in the western Corn Belt at $106.50-$107.00. Dressed trade was $2 higher in Nebraska at $165 and $2-$7 higher in the western Corn Belt at $165-$170.

Through Thursday, the five-area direct weighted average steer price was $104.49/cwt. on a live basis, which was $3.21 more than the previous week, and just 91¢ less than the prior year, keeping in mind that the Aug. 9 Tyson fire last year slammed cattle markets. In the beef, the weighted average steer price was $168.06, which was $4.87 more than the previous week, and $2.40 less than the prior year.

Live Cattle futures closed an average of $2.23 higher week to week on Friday (60¢ higher at the back to $4.80 higher in spot Aug).

USDA’s Economic Research Service (ERS) increased the expected annual fed steer price for this year 50¢ from the previous month’s projection to $107.30/cwt., in the latest WASDE. Forecast prices are $101 in the third quarter, $104 in the fourth quarter and $105 in the first two quarters next year.

Overall wholesale beef values continued to gain ground for the second consecutive week. Choice boxed beef cutout value was $8.77 higher week to week on Friday at $214.24/cwt. Select was $6.54 higher at $199.29.

“Boxed beef prices are at their highest level since the middle of June. Much of this rebound is likely due to the upcoming Labor Day holiday as many grocery stores are making their final purchases for the last grilling holiday of the year,” Griffith says. “Choice prices are only $2/cwt. lower than the same week one year ago, while Select prices are about $7 higher than the same week last year. There may be some additional Labor Day beef buying, as it is still three full weeks down the road, which provides grocery stores a little more time to get product on the shelf. The beef market will continue to be supported as grocery stores make purchases to restock the meat counter following holiday purchases.”

Estimated total cattle slaughter last week of 640,000 was 7,000 head more than the previous week’s estimate, but 13,000 fewer than the same week a year earlier. Year-to-date estimated total cattle slaughter is 5.1% less than the same period last year at 19.69 million head. Estimated year-to-date total beef production is 2.4% less at 16.27 billion lbs.

Friday to Friday Change

Weekly Auction Receipts

 

Aug. 14 Auction Direct

Video/net

Total
 

158,100

(-13,700)

66,500

(+100)

7,000

(-255,400)

231,600

(-268,000)

 

 

CME Feeder Index

CME Feeder Index* Aug. 13 Change
  $142.25 +  $0.33

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 14 Change
600-700 lbs. $160.61 +  $4.22
700-800 lbs. $150.03 +  $3.44
800-900 lbs. $144.08 –   $0.41

 

South Central

Steers-Cash Aug. 14 Change
500-600 lbs. $157.38 –  $1.00
600-700 lbs. $150.03 + $0.21
700-800 lbs. $143.40 + $0.83

 

Southeast

Steers-Cash Aug. 14 Change
400-500 lbs. $150.61 + $0.97
500-600 lbs. $140.08 –  $0.82
600-700 lbs. $136.48 + $3.37

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 14 ($/cwt) Change
Choice $214.24 + $8.77
Select $199.29 + $6.54
Ch-Se Spread $14.95 + $2.23

 

Futures

Feeder Cattle  Aug. 14 Change
Aug $143.925 + $1.200
Sep $146.575 + $1.450
Oct $147.425 + $1.025
Nov $147.825 + $0.850
Jan ’21 $145.225 + $1.025
Mar $143.875 + $1.150
Apr $144.175 + $0.725
May $144.000 + $0.275

 

Live Cattle   Aug. 14 Change
Aug $107.600 + $4.800
Oct $110.225 + $3.775
Dec $112.825 + $2.750
Feb ’21 $115.850 + $2.050
Apr $117.800 + $1.475
Jun $111.300 + $1.500
Aug $109.900 + $1.775
Oct $111.825 + $1.375
Dec $114.800 + $0.600

 

Corn  Aug. 14 Change
Sep $3.244 + $0.168
Dec $3.380 + $0.174
Mar ’21 $3.492 + $0.166
May $3.566 + $0.154
Jly $3.624 + $0.148
Sep $3.650 + $0.124

 

Oil CME-WTI Aug. 14 Change
Sep $42.01 + $0.79
Oct $42.31 + $0.82
Nov $42.67 + $0.81
Dec $43.00 + $0.81
Jan ’21 $43.30 + $0.82
Feb $43.58 + $0.82

 

Equities

Equity Indexes Aug. 14 Change
Dow Industrial Average  27931.02 +  497.54
NASDAQ  11019.30 +      8.32
S&P 500   3372.85 +     21.57
Dollar (DXY)       93.10 –        0.29
August 16th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Aug. 7, 2020

Calves and feeder cattle continued to trend higher last week, helped along by stronger cash fed cattle prices.

Nationwide, steers and heifers sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Every year, producers try to get long or short yearling cattle marketed before the Labor Day holiday and this year has been no exception,” say AMS analysts. “The first full week in August brought around 11% more cattle to the sale barns than a year ago.” 

Except for 15¢ higher in Nov, Feeder Cattle futures closed an average of 98¢ lower week to week on Friday (25¢ to $1.95 lower).

“Extremely unique market dynamics are driving the cattle market to price levels that may not have been imaginable just a few weeks ago,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The feeder cattle market is being driven by expectations for higher finished cattle prices. The February live cattle contract price increased $7 since July 1, which would be nearly a $100 per head increase in value for a 1,400 lb. animal. The increase in the live cattle contract has pushed the August feeder cattle contract $10 higher, which would be an $80 per head value increase.”

The CME Feeder Cattle Index was $3.34 higher week to week on Thursday at $141.92.

Griffith notes that cattle feeders must expect fed cattle prices to continue increasing, given the current buy-sell margin of locking in a price currently and how much more they’re willing to pay for feeder cattle.

At the same time, AMS analysts point out deepening drought in some parts of the country is beginning to force some management and marketing decisions.

For the week of Aug. 4, the U.S. Drought Monitor classified 54.01% of the continental United States from abnormally dry to extreme drought. That’s the fourth consecutive week that more than half of the nation was enduring designated dryness or drought conditions, according to AMS.

“One region of note would be in Wyoming and creeping into Northwest Nebraska. Some producers in those areas are contemplating early weaning of calves,” AMS analysts explain. 

The most recent USDA Crop Progress report pegged 30% of the nation’s pasture and range condition as Poor or Very Poor, which was 17% more than the same time last year.

Cash Fed Cattle Trade Higher

Negotiated cash fed cattle trade for the week was mainly $3 higher through Friday afternoon at $103/cwt. on a live basis and at $163 in the beef.

Through Thursday, the five-area direct weighted average steer price was $101.28 on a live basis, which was $2.79 higher than the previous week. The average dressed steer price was $163.19, which was $3.17 higher than the prior week. Compared to the same time last year, though, those prices were $12.83 less and $19.38 less, respectively.

According to AMS, slaughter cattle numbers remain tighter in the Northern Plains, while supplies continue to outpace packing capacity in the Southern Plains.

Griffith points out it has been a year since the Tyson packing plant fire in Kansas roiled markets.

“The market has essentially been in a funk for 52 weeks, due to the fire and coronavirus. The market appears to be trying to shake all the tough times over the last year, but there are more rivers to forge before anyone is comfortable,” Griffith says.

Except for 47¢ and 57¢ higher in Apr and away Dec, Live Cattle futures closed an average of 55¢ lower week to week on Friday (2¢ to $1.47 lower).

“Sideways action at the CME could be viewed as a friendly,” say AMS analysts. The largest single-day move this week on any of the six front Cattle contracts was $1.33 lower.” 

Wholesale Values Bump Higher

Wholesale beef prices continued to edge higher from the recent bottom.

Choice boxed beef cutout value was $2.21 higher week to week on Friday at $205.47/cwt. Select was $2.86 higher at $192.75.

Estimated cattle slaughter for the week ending Aug. 8 was 633,000 head, which would be 5,000 head fewer than the previous week and 14,000 head fewer than the same week last year.

Year to date, total cattle slaughter was 1.04 million less (-5.2%) than the same period last year at 19.05 million head.

Estimated beef production for the week was 527.2 million lbs., which was 3.1 million lbs. less than the previous week, but 5.6 million lbs. more than the prior year.

Year to date, estimated beef production of 15.74 billion lbs. is 405 million lbs. less (-2.5%) than last year.

“Beef supply conditions have stabilized, albeit at higher levels of production year over year in the second half of 2020. Beef demand will be critical in determining overall beef prices and, subsequently, cattle prices going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

The advance estimate for U.S. real GDP in the second quarter was a staggering -32.9%, according to the U.S. Bureau of Economic Analysis. The nation’s unemployment rate in July was 10.2%.

“In the short run, willingness to purchase beef will depend on the relative prices of other products, particularly substitute products that may be consumed in place of a particular product,” Peel says. “For specific beef products, this is a complicated consideration, including other proteins such as pork and poultry, as well as the multitude of other beef products that may be chosen by consumers. In periods of low income, beef consumers may trade down from high cost beef products to lower valued products. Food service demand, which remains diminished, will emphasize this impact going forward.”

Friday to Friday Change

 

Weekly Auction Receipts

 

Aug. 7 Auction Direct

Video/net

Total
 

171,800

(+35,700)

66,400

(+17,900)

261,400

(+261,000)

499,600

(+314,600)

 

 

CME Feeder Index

CME Feeder Index* Aug. 6 Change
  $141.92 +  $3.34

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Aug. 7 Change
600-700 lbs. $156.39 +  $2.81
700-800 lbs. $146.59 +  $1.36
800-900 lbs. $144.49 +  $3.63

 

South Central

Steers-Cash Aug. 7 Change
500-600 lbs. $158.38 + $4.16
600-700 lbs. $149.82 + $1.72
700-800 lbs. $142.57 + $2.37

 

Southeast

Steers-Cash Aug. 7 Change
400-500 lbs. $149.64 + $0.82
500-600 lbs. $40.90 + $1.00
600-700 lbs. $133.11 –  $1.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Aug. 7 ($/cwt) Change
Choice $205.47 + $2.21
Select $192.75 + $2.86
Ch-Se Spread $12.72 –  $0.65

 

Futures

Feeder Cattle  Aug. 7 Change
Aug $142.725 –  $1.950
Sep $145.125 –  $1.100
Oct $146.400 –  $0.250
Nov $146.975 + $0.150
Jan ’21 $144.200 –  $0.400
Mar $142.725 –  $0.625
Apr $143.350 –  $1.225
May $143.725 –  $1.325

 

Live Cattle   Aug. 7 Change
Aug $102.800 –  $0.025
Oct $106.450 –  $1.425
Dec $110.075 –  $1.475
Feb ’21 $113.800 –  $0.750
Apr $116.325 + $0.475
Jun $109.800 –  $0.150
Aug $108.125 –  $0.575
Oct $110.450 –  $0.125
Dec $114.200 + $0.575

 

Corn  Aug. 7 Change
Sep $3.076 – $0.084
Dec $3.206 – $0.064
Mar ’21 $3.326 – $0.056
May $3.412 – $0.048
Jly $3.476 – $0.046
Sep $3.526 – $0.028

 

Oil CME-WTI Aug. 7 Change
Sep $41.22 + $0.95
Oct $41.49 + $0.92
Nov $41.86 + $0.95
Dec $42.19 + $0.97
Jan ’21 $42.48 + $0.99
Feb $42.76 + $1.01

 

Equities

Equity Indexes Aug. 7 Change
Dow Industrial Average  27433.48 +1005.16
NASDAQ  10745.28 +  265.70
S&P 500   3271.12 +     80.16
Dollar (DXY)       93.46 –        0.07
August 8th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending July 31, 2020

Calf prices continued to move contra-seasonally last week, seeking post-COVID fundamental levels, while strong demand continued for yearlings, with more optimism for fed cattle values.

Nationwide, steers and heifers sold steady to $4/cwt. higher, with the most advance on yearlings weighing more than 800 lbs., according to the Agricultural marketing Service (AMS).

“Calf prices are holding their own, and this is most likely due to how low prices were in the spring. Thus, it is not that calf prices are strong. They are simply trying to find where they should be, given today’s market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This class of cattle will start to see some pressure towards the end of summer and moving into the fall months.”

As for feeder cattle, Griffith says there is plenty of market optimism, but suggests, “Producers should take advantage of the marketing opportunity being made available to them right now. If the cattle will make money with a sale today, then move them. If the cattle need a few more days of growing, then try to forward contract the cattle.”

Feeder Cattle futures closed an average of $3.34 higher week to week on Friday, supported by the outlook for favorable corn prices.

“With improving corn conditions at this time of year, yields will no doubt improve, keeping the corn market under pressure, regardless of demand,” say AMS analysts. “Big crops usually get bigger and yields will be no exception. This makes it hard to convince anyone, especially farmer-feeders, that we will have any corn production problems. Thoughts that the size of the corn crop will overshadow demand has many producers willing to walk a lot of corn to town.”

Corn crop progress is ahead of last year and the five-year average, with 72% rated in Good or Excellent condition, in the USDA Crop Progress report for the week ending July 26.

Corn futures were an average of 7¢ lower through the front six contracts, week to week on Friday.

Griffith also notes demand continues to be contra-seasonally strong for packer cows and bulls. “This is likely due to the demand for lean grinding beef that has skyrocketed during the COVID-19 pandemic as consumers are pulling ground beef off meat counter shelves rapidly,” he says.

Fed Cattle Prices Edge Higher

Negotiated cash fed cattle prices ended the week generally $1-$2 higher on a live basis at $97/cwt. in the Southern Plains, $100 in Nebraska, $98 in Colorado and steady at $101-$102 in the western Corn Belt. Dressed prices were $2 higher at $160.

Through Thursday, the average five-area direct weighted steer prices was $98.49/cwt. on a live basis, which was $1.26 more than the previous week, but $15.48 less than the same time last year. The average dressed steer price of $160.02 was $1.92 higher than the previous week, but $24.49 less than the previous year.

There are still plenty of backlogged market-ready fed cattle to work through, but it appears progress is being made, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

“The calculated estimates of cattle on feed over 120 days are still very large compared to last year, but the difference has decreased by some 160,000 head since May,” Peel says, referring to the latest monthly Cattle on Feed report. “It appears that the backlog is decreasing but a sizable number of cattle remain to be cleaned up before feedlots will be current.”

Estimated total cattle slaughter for the week ending Aug. 1 was 638,000 head, which was 8,000 fewer than the previous week, but 5,000 head more than the same week last year. Year-to-date estimated total cattle slaughter of 18.4 million head is 1.02 million head fewer (-5.26%) than last year.

Live Cattle futures closed an average of $1.81 higher week to week on Friday. Along with firming wholesale beef values, support included a more positive weekly export outlook. U.S. beef export net sales for the week of July 23 totaled 29,500 metric tons (mt)—a market year high—up 89% from the previous week and up 81% from the previous four-week average. That’s according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service.

AMS analysts note the weaker U.S. dollar is helping exports, with the dollar index at its lowest level in two years.

“At this point in the game, it would appear the summer low is in for finished cattle. That likely means a slow grind to higher prices, because the Labor Day holiday is the only grilling holiday remaining and December is several months down the road,” Griffith says. “It is tough to predict how strong this market will be, but there is a chance of reaching $115 in December.”

Wholesale Beef Values Firm

Choice boxed beef cutout value closed higher week to week for the second consecutive week, suggesting the ebb is established and the market will proceed along more fundamental lines.

Choice boxed beef cutout value was $1.49 higher week to week on Friday at $203.26/cwt. Select was 74¢ lower at $189.39.

“Hopefully, price levels should be attractive for retail interest and to consumers with some of the lowest beef prices seen for the month of July,” say AMS analysts. 

The average dressed steer weight the week ending July 18 of 899 lbs. was 3 lbs. less than the prior week but 33 lbs. more than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as a week earlier but 34 lbs. heavier than the prior year.

“Federally inspected beef production has been above year-ago levels since the second week of June, while federally inspected cattle slaughter is down nearly 70,000 head over the same timeframe, compared to last year,” Griffith explains. “The increase in beef production stems from heavier cattle that spent more days on feed than was anticipated. However, it is not only total beef production that is being influenced by more days on feed. The increased number of days on feed is likely the reason more cattle are grading Choice.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 31 Auction Direct

Video/net

Total
 

136,100

(+8,000)

48,500

(-31,000)

400

(-96,200)

185,000

(-119,200)

 

 

CME Feeder Index

CME Feeder Index* July 30 Change
  $138.58 –   $0.85

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 31 Change
600-700 lbs. $153.58 –   $9.14
700-800 lbs. $145.23 –   $3.79
800-900 lbs. $140.86 –   $0.55

 

South Central

Steers-Cash July 31 Change
500-600 lbs. $154.22 + $1.41
600-700 lbs. $148.10 + $3.00
700-800 lbs. $140.20 –  $0.28

 

Southeast

Steers-Cash July 31 Change
400-500 lbs. $148.82 + $1.98
500-600 lbs. $139.90 + $0.96
600-700 lbs. $134.26 + $2.18

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 31 ($/cwt) Change
Choice $203.26 + $1.49
Select $189.89 –  $0.74
Ch-Se Spread $13.37 + $2.23

 

Futures

Feeder Cattle  July 31 Change
Aug $144.675 + $2.625
Sep $146.225 + $3.475
Oct $145.650 + $3.850
Nov $146.825 + $4.150
Jan ’21 $144.600 + $3.575
Mar $143.350 + $3.175
Apr $144.575 + $3.250
May $145.050 + $2.625

 

Live Cattle   July 31 Change
Aug $102.825 + $1.500
Oct $107.875 + $2.775
Dec $111.550 + $2.225
Feb ’21 $114.550 + $2.100
Apr $115.850 + $1.875
Jun $109.950 + $1.500
Aug $108.700 + $1.400
Oct $110.575 + $1.050
Dec $113.625 + $1.875

 

Corn  July 31 Change
Sep $3.160 – $0.102
Dec $3.270 – $0.080
Mar ’21 $3.382 – $0.078
May $3.460 – $0.070
Jly $3.522 – $0.062
Sep $3.554 – $0.042

 

Oil CME-WTI July 31 Change
Sep $40.27 –  $1.02
Oct $40.57 –  $0.88
Nov $40.91 –  $0.73
Dec $41.22 –  $0.60
Jan ’21 $41.49 –  $0.51
Feb $41.75 –  $0.43

 

Equities

Equity Indexes July 31 Change
Dow Industrial Average  26428.32 –     41.57
NASDAQ  10745.28 +  382.10
S&P 500   3271.12 +     55.49
Dollar (DXY)       93.46 –        0.89
August 2nd, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending July 24, 2020

Recently increased feedlot turnover and the availability of grass yearlings helped lift calf and feeder cattle prices last week. Nationwide, steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS).

Feeder Cattle futures closed an average of 93¢ lower week to week on Friday (32¢ lower at the back to $1.42 lower).

“The strength that has been evident in the futures market the past couple of weeks is beginning to become evident in the cash feeder cattle and calf markets,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The calf market price movement could be considered contra-seasonal because the calf market tends to soften during the heat of summer and moving into the fall. However, the coronavirus pandemic depressed the calf market through the spring months and the first part of summer. The calf market is now trying to realign based on fundamental supply and demand. It is going to be extremely difficult to predict where this market will go over the next several months, but there is a good possibility that fall prices will be better than the fall of 2019.”

As for feeder cattle, Griffith notes the seasonal tendency of increasing prices through the summer seems to be intact.

“The market is offering producers an opportunity to sell calves at higher prices, and there is more upside potential,” Griffith says. “However, the market is so fragile that any negative news within the beef industry, such as news of higher feed costs or something negatively associated with coronavirus, could turn the feeder cattle market on its head.”

Get through August and net feedlot returns grow significantly more positive, according to the most recent Historical and Projected Kansas Feedlot Net Returns (HPK) from Kansas State University.

Fed Cattle Prices Edge Higher

Through Thursday, the average five-area direct fed steer price was $97.23/cwt. on a live basis, which was 91¢ higher than the previous week, but $18.20 less than the same time last year.

Regionally, negotiated cash fed cattle trade for the week was generally $1-$2 higher on a live basis at $96/cwt. in the Southern Plains, $98 in the Northern Plains and $99-$100 in the western Corn Belt. Dressed trades were mostly $1 higher at $158.

Live Cattle futures closed an average of 95¢ lower week to week on Friday (12¢ lower at the back to $1.95 lower in spot Aug).

Total estimated cattle slaughter for the week ending July 25 of 646,000 head would be 4,000 head fewer than the prior week and 6,000 head fewer than the same week a year earlier, according to USDA’s Estimated Weekly Meat Production Under Federal Inspection report.  

Year to date, through June, fed cattle slaughter of 12.08 million was 772,600 head fewer (-6.01%) than the same time last year, according to the monthly USDA Livestock Slaughter report.

Boxed Beef Price Might be Established

“There is a very good chance boxed beef prices have hit their summer low,” Griffith says. “If they have hit their low, then there is a good chance they will be somewhat stagnant for a while before a slow grind higher leading up to holidays at the end of the year. How high boxed beef prices move through the end of the year may depend on how holidays are celebrated if coronavirus remains a concern.”

Choice boxed beef cutout value was $1.30 higher week to week on Friday at $201.77/cwt. Select was 32¢ higher at $190.63.

“The expectation of strong beef production through the end of the year will temper wholesale beef values to some degree, simply due to the quantity supplied to the market,” Griffith explains. “Despite this strong production, Choice boxes have the potential to move back to the $225 to $230/cwt. range as an apex before the end of the year.”

Year to date through June, beef production under federal inspection of 12.78 billion lbs. was 279.7 million lbs. less (-2.14%) than the same time last year, according to the Livestock Slaughter report.

Heavier carcass weights continue to close the gap between beef production and the number of cattle harvested.

Year to date through June, the average dressed steer weight of 897 lbs. is 33 lbs. heavier. The average dressed heifer weight of 829 lbs. is 25 lbs. heavier. Both are record high, according to AMS.

“Beef production will be higher year over year for the remainder of the year,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-week market comments. “This may combine with limited demand to keep wholesale beef prices under pressure going forward.

“Longer term, beef demand may be affected by the economic recession. Impacts have not been obvious thus far but unemployment is still high and some unemployment benefits will end this month. With COVID-19 far from controlled, considerable uncertainty remains regarding how school schedules, sporting activities and business travel could affect beef demand this fall.”

USDA Reports on Price Investigation

USDA released its investigation into cattle and beef price reactions to last summer’s fire at the Tyson plant in Holcombe, KS and to disruptions wrought by COVID-19.

The report—Boxed Beef & Fed Cattle Price Spread Investigation Report—details market conditions and prices before, during and after those events, although the pandemic continues.

Keep in mind this USDA investigation does not examine potential violations of the Packers and Stockyards Act. USDA continues to cooperate with the Department of Justice Antitrust Division in that agency’s current investigation.

Instead, the report provides the logic and details behind the price reactions of the two black swan events: higher wholesale beef prices and lower fed cattle prices spawned by disruption to packing capacity and by altered demand flow, in the case of the pandemic.

“Frankly speaking, the report released by USDA did not reveal anything that was not already known,” Griffith says. “It appeared to be less of an investigation and more of a simple analysis and report of the data. Something further could come of this report, but it is highly unlikely any type of investigation is going to result in findings of the packers doing something illegal. Packers were taking advantage of what the market was offering.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 24 Auction Direct

Video/net

Total
 

128,100

(-21,000)

79,500

(-16,000)

96,600

(-228,800)

304,200

(-266,400)

 

 

CME Feeder Index

CME Feeder Index* July 23 Change
  $139.43 +  $2.82

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 24 Change
600-700 lbs. $162.72 +  $11.41
700-800 lbs. $149.02 +  $6.24
800-900 lbs. $141.41 +  $3.90

 

South Central

Steers-Cash July 24 Change
500-600 lbs. $152.81 + $0.55
600-700 lbs. $145.10 –  $0.11
700-800 lbs. $140.48 + $1.35

 

Southeast

Steers-Cash July 24 Change
400-500 lbs. $146.84 + $2.03
500-600 lbs. $138.94 + $1.77
600-700 lbs. $132.08 + $2.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 24 ($/cwt) Change
Choice $201.77 + $1.30
Select $190.63 + $0.32
Ch-Se Spread $11.14 + $0.98

 

Futures

Feeder Cattle  July 247 Change
Aug $142.050 –  $0.650
Sep $142.750 –  $0.575
Oct $142.800 –  $0.800
Nov $142.675 –  $1.175
Jan ’21 $141.025 –  $1.375
Mar $140.175 –  $1.425
Apr $141.325 –  $1.125
May $142.425 –  $0.325

 

Live Cattle   July 24 Change
Aug $101.325 –  $1.950
Oct $105.100 –  $1.775
Dec $109.325 –  $1.375
Feb ’21 $112.450 –  $1.325
Apr $113.975 –  $1.000
Jun $108.450 –  $0.275
Aug $107.300 –  $0.475
Oct $109.525 –  $0.275
Dec $111.750 –  $0.125

 

Corn  July 24 Change
Sep $3.262 – $0.068
Dec $3.350 – $0.046
Mar ’21 $3.460 – $0.036
May $3.530 – $0.030
Jly $3.584 – $0.022
Sep $3.596 – $0.008

 

Oil CME-WTI July 24 Change
Sep $42.18 + $1.43
Oct $42.00 + $1.06
Nov $41.82 + $0.71
Dec $41.64 + $0.37
Jan ’21 $41.45 + $0.03
Feb $41.29 –  $0.29

 

Equities

Equity Indexes July 24 Change
Dow Industrial Average  26469.89 –  202.06
NASDAQ  10363.18 –  140.01
S&P 500   3215.63 –       9.10
Dollar (DXY)       94.35 –       1.66
July 26th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending July 17, 2020

Renewed optimism continued in cattle markets last week, bolstered by strong week-to-week gains in Cattle futures prices. Traders are apparently looking beyond the current backlog of fed cattle.

Calves and feeder cattle sold mixed. Steers and heifers in the South Central region traded $3-$4/cwt. higher, according to the Agricultural Marketing Service (AMS). In the North Central and Southeast regions, though, they sold from $3 lower to $1 higher.

AMS analysts note, “There was a big increase in North Central prices last week, due to some annual specials that bring high-quality, reputation, one-iron brand strings of cattle to town.” 

Feeder Cattle futures closed an average of $4.44 higher week to week on Friday ($2.95 higher to $6.95 higher in spot Aug).

“The market for heavier feeder cattle is beginning to gain some steam, which is a typical seasonal pattern,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The August Feeder cattle contract traded to its highest level since March 4 and has gained more than $6 since the Independence Day holiday. The August Feeder Cattle contract is still $14 lower than its contract high set in early January, but it is also $26 higher than its contract low set in early April. It is probably not feasible for the market to move back above the $150 mark for the August contract, but it could still have some upside potential given its slow and steady ascent back to its current level.”

On the other hand, Griffith notes summer heat and seasonality are weighing on calf prices. “The prices will continue to be pushed lower in the fall as the run of spring born calves make their way to market,” he says.

In the latest monthly Livestock, Dairy and Poultry Outlook (LDPO), analysts with USDA’s Economic Research Service (ERS) say expected higher fed cattle slaughter and increased feedlot marketings should improve demand for feeder cattle heading into the third quarter.

ERS projects the average feeder steer price (basis Oklahoma City) at $133/cwt. in the third quarter and $131 in the fourth quarter for an annual average of $131.70. Prices are projected at $129 in the first quarter of next year and at $132 in the second.

Of course, dry conditions could have plenty to say about late-summer markets.

“For the first time this year, over 50% of the country is in some sort of drought designation,” say AMS analysts. “The last time that occurred was the week ending Sept. 18, 2018, when the country was coming off a historical drought.”

Specifically, 51.4% of the continental U.S. was designated from abnormally dry to Extreme Drought, according to the U.S. Drought Monitor for July 14. At the same time last year, it was 9.79%.

For the week ending July 12, 36% of the nation’s pasture and range was rated in Good or Excellent condition, which was 32% less than last year, according to USDA’s Crop Progress report. Conversely, 30% was rated in Poor or Very Poor condition, compared to 8% at the same time last year.

Fed Cattle Prices Firm

Negotiated cash fed cattle prices were mainly steady last week.

The weighted average five-area direct fed steer price through Thursday was $96.32/cwt. on a  live basis, which was 35¢higher than the previous week, but $16.70 less than the same week last year. The average steer price in the beef was $157.58, which was 9¢less than the previous week and $25.39 less than a year earlier.

Live Cattle futures closed an average of $1.89 higher week to week on Friday ($1.05 higher to $3.27 higher in spot Aug).

“The October Live Cattle futures contract gained $6 since the beginning of July, while the December Live Cattle contract gained about $5.50 over that same timeframe,” Griffith says. “These prices still do not put finished cattle where cattle feeders want them, but there is a lot of time between now and the fall marketing time period for cattle to keep creeping higher. Another point of optimism is the fact that current cash prices have found a steady state instead of continuing to decline. The steep decline through the spring did not bode well for summer market prices, but they are holding their ground well given seasonal pressure.”

However, ERS lowered forecast fed steer prices by $4 to $100/cwt. in the third quarter and by $3 in the fourth quarter to $103.

“Despite slaughter rates having stabilized near year-ago levels, there continues to be a large volume of market-ready cattle supplies available for slaughter,” say ERS analysts, in the LDPO. “Based on the USDA Cattle on Feed report for June, the number of cattle that have been on feed over 150 days grew to 971,000 head, or 42% more than last year. Further, wholesale beef prices declined rapidly from recent peaks to below year-ago levels, marking a sharp turnaround.”

Retail Beef Prices Still Elevated

Choice boxed beef values last week sank to the lowest levels since December of 2017, according to AMS.

Choice boxed beef cutout value was $4.03 lower week to week on Friday at $200.47/cwt. Select was $3.98 lower at $190.31.

Renewed packing capacity and cattle slaughter is behind normalizing wholesale values, while heavier carcasses are adding extra pressure.

ERS increased forecast beef production for this year by 260 million pounds, compared to the prior month, to 26.9 billion lbs., just about 1% less than last year.

At the same time, retail beef prices remain high, relative to current production, following the price surge in the wake of coronavirus disruptions.

Retail Choice beef value in June was nearly $7.56/lb.. That was a tick lower than in May but $1.05 higher than in January, according to Griffith. The all fresh retail beef price was around $7.38/lb., up 34¢ from May and $1.46 more compared to January.

“Retailers were forced to push prices higher rather rapidly in April and May due to reduced supply of beef from lower cattle slaughter,” Griffith explains. “Though prices escalated quickly at the retail level, it is doubtful they will decline as quickly. Retailers are looking to make up for the losses they likely incurred during late March and April. Therefore, it will be a long slow march through the rest of the year as retail beef prices soften. There is no guarantee the prices will be back to pre-COVID-19 levels by the end of the year.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 17 Auction Direct

Video/net

Total
 

149,100

(+14,600)

96,100

(+23,100)

325,400

(n/a)

570.600

(+263,100)

 

 

CME Feeder Index

CME Feeder Index* July 16 Change
  $136.61 +  $1.69

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 17 Change
600-700 lbs. $151.31 –    $8.53
700-800 lbs. $142.78 –    $2.69
800-900 lbs. $137.51 –    $1.81

 

South Central

Steers-Cash July 17 Change
500-600 lbs. $152.26 + $4.26
600-700 lbs. $145.21 + $2.60
700-800 lbs. $139.13 + $4.02

 

Southeast

Steers-Cash July 17 Change
400-500 lbs. $144.81 –  $0.67
500-600 lbs. $137.17 –  $0.25
600-700 lbs. $129.81 –  $1.91

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 17 ($/cwt) Change
Choice $200.47 –  $4.03
Select $190.31 –  $3.98
Ch-Se Spread $10.16 –  $0.05

 

Futures

Feeder Cattle  July 17 Change
Aug $142.700 + $6.950
Sep $143.325 + $6.000
Oct $143.600 + $5.100
Nov $143.850 + $4.125
Jan ’21 $142.400 + $3.425
Mar $141.600 + $2.950
Apr $142.450 + $3.275
May $142.750 + $3.375

 

Live Cattle   July 17 Change
Aug $103.275 + $3.275
Oct $106.875 + $2.300
Dec $110.700 + $2.300
Feb ’21 $113.775 + $2.050
Apr $114.975 + $1.250
Jun $108.725 + $1.050
Aug $107.775 + $1.325
Oct $109.800 + 1.725
Dec $111.875 + $1.750

 

Corn  July 17 Change
Sep $3.330 – $0.042
Dec $3.396 – $0.050
Mar ’21 $3.496 – $0.054
May $3.560 – $0.052
Jly $3.606 – $0.056
Sep $3.604 – $0.038

 

Oil CME-WTI July 17 Change
Aug $40.59 + $0.04
Sep $40.75 –  $0.01
Oct $40.94 -0-
Nov $41.11 + $0.01
Dec $41.27 + $0.02
Jan ’21 $41.42 + $0.02

 

Equities

Equity Indexes July 17 Change
Dow Industrial Average  26671.95 + 596.65
NASDAQ  10503.19 –  114.95
S&P 500   3224.73 +    39.69
Dollar (DXY)       96.01 –       0.65
July 26th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending July 10, 2020

Calves and feeder cattle sold mixed last week, with stark regional variation. Steers and heifers sold $4-$9/cwt. higher in the North Central region, but $2 lower to $2 higher in the South Central and Southeast regions, according to the Agricultural Marketing Service (AMS).

“There have been some positive signs of the feeder cattle market recovering, which brings optimism to many,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, it is still going to be a long haul before the market is fully recovered.”

Feeder Cattle futures closed an average of $1.62 higher week to week on Friday, compared to the previous Thursday.

Fed Cattle Prices Steady to Higher

Negotiated cash fed cattle prices last week were generally steady to a touch stronger, leading some to wonder of the price bottom is established. Others suspect more pressure amid increasing beef production.

The weighted average five-area direct fed steer price through Thursday was $95.97/cwt. on a live basis and $157.67 in the beef. That was $1.06 and $3.84 higher, respectively.

In the latest monthly World Agricultural Supply and Demand Estimates (WASDE), analysts with USDA’s Economic Research Service (ERS) project the five-area direct weighted average steer price at $100/cwt. in the third quarter and at $103 in the fourth quarter for an annual average price of $106.80. That’s $1.80 less than the June projection. The projected annual price next year is $110, with prices estimated at $104 in the first quarter and $105 in the second.

Live Cattle futures closed an average of $1.47 higher week to week on Friday, compared to the previous Thursday (57¢ to $2.47 higher).

Griffith points out Aug Live Cattle ground its way back to $100, while Oct and Dec are trading above $100.

“The reason this is optimistic is because there is nothing in the cattle feeder’s favor right now,” Griffith says. “Coronavirus hit the market hard. Now, the seasonal tendencies of finished cattle prices are weighing on the market. On top of what is going on in the cattle market, corn futures prices have increased even though they are beginning to ease a little.”

WASDE estimated corn production for this year at 15.0 billion bu., which was 995 million bu. less (-6.22%) than the previous month’s estimate, given the 5 million fewer planted acres projected in June’s Acreage report.

Corn production, with projected yield of 178.5 bu./acre, would be 1.38 billion bu. more than last year (+10.16%). With 2020-2021 supply declining more than use, the forecast season-average corn price received by producers was raised 15¢ to $3.35/bu. 

Wholesale Values Normalize

Wholesale beef values appear to about back into balance.

Choice boxed beef cutout value was 94¢ lower week to week on Friday (compared to the previous Thursday) at $204.50/cwt. Select was $4.47 lower at $194.29.

“The wholesale beef market is remaining surprisingly strong, given the cattle slaughter rate and total beef production. Weekly beef production has consistently exceeded year-ago levels for several weeks now. This is expected to continue until all of the backlogged cattle are harvested,” Griffith says. “Increased beef production is likely to continue even after the backlog is cleared with heavier cattle coming to market. The key to beef and cattle prices strengthening will be the demand side of the market, because the supply side is firm.”

USDA estimated total federally inspected cattle slaughter for the week ending July 11 at 664,000 head, which would be 6,000 head more than the same week last year. Estimated beef production for the week of 550.3 million lbs. would be 22.3 million lbs. more (+4.22%) than the prior year. Year-to-date beef production is estimated at 13.63 billion lbs., which would be 427 million lbs. less (-3.04%) than the same period last year.

AMS analysts point out 83.7% of carcasses graded Choice and Prime for the week ending June 27. That was 6.6% more than the same time a year earlier. “Most of this is due to cattle being fed for a longer period, with some being fed around 200 days,” they say.

Total red meat production under federal inspection is projected at 1.11 billion lbs., which would be 71.7 million lbs. more (+6.89%) than the same week a year earlier. Year-to-date total red meat production is estimated at 28.18 billion lbs., which would be 318.10 million lbs. less (-1.12%) than the same time last year.

Coronavirus Pressures Beef Demand

Beef demand faces continued challenge, both from economic damage already wrought by COVID-19, and with increasing domestic infections.

Internationally, consider U.S. beef exports in May, which were 33% less than a year earlier at 79,280 metric tons (mt)—the lowest monthly total in 10 years—according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Value was 34% less than the same time last year at $480.1 million.

“As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports,” explains USMEF President and CEO Dan Halstrom. “Unfortunately, the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies.”

Domestically, Griffith explains, “Increased coronavirus cases in many states the past several weeks resulted in many states and local municipalities reverting back to more strict social distancing, as well as adding new precautions. This reversion is sure to negatively influence restaurants again as fewer customers can walk through the doors and because many consumers will revert back to more at-home meals.”

As mentioned in Cattle Current earlier in the week, U.S. restaurant customer transactions stalled for the second week in a row, amid increasing COVID-19 cases in some states, according to The NPD Group (NPD).

For the week ending June 28, total customer transactions at major U.S. restaurant chains were down 14% versus the same week a year ago.  That’s a 1% decline from the previous week, based on NPD’s CREST®Performance Alerts.

Nationwide, full service restaurant customer transactions were 25% less than a year earlier, for the week ending June 28. That was a 1% weekly decline overall, while transactions fell 6-9% in states where coronavirus is increasing.

“It’s apparent that the road to recovery is going to be a challenging one for the U.S. restaurant industry,” says David Portalatin, NPD food industry advisor. “Consumer demand is there, as is the want for normalcy, but there is nothing normal about this situation.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 10 Auction Direct

Video/net

Total
 

134,500

(+50,800)

73,000

(+39,400)

n/a

(n/a)

207,500

(+58,300)

 

 

CME Feeder Index

CME Feeder Index* July 9 Change
  $134.92 +  $6.04

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 10 Change
600-700 lbs. $159.84 +   $11.72
700-800 lbs. $145.47 +   $9.05
800-900 lbs. $139.32 +   $5.20

 

South Central

Steers-Cash July 10 Change
500-600 lbs. $148.00 –  $3.47
600-700 lbs. $142.61 –  $0.70
700-800 lbs. $135.11 + $1.05

 

Southeast

Steers-Cash July 10 Change
400-500 lbs. $145.48 –  $0.26
500-600 lbs. $137.42 –  $2.54
600-700 lbs. $131.72 –  $0.43

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 10 ($/cwt) Change
Choice $204.50 –  $0.94
Select $194.29 –  $4.47
Ch-Se Spread $6.682 + $3.53

 

Futures

Feeder Cattle  July 10 Change
Aug $135.750 + $0.875
Sep $137.325 + $1.475
Oct $138.500 + $1.800
Nov $139.275 + $1.925
Jan ’21 $138.975 + $1.900
Mar $138.650 + $1.825
Apr $139.175 + $1.225
Aug $139.375 + $1.925

 

Live Cattle   July 10 Change
Aug $100.000 + $0.600
Oct $104.575 + $1.900
Dec $108.400 + $2.475
Feb ’21 $111.725 + $1.975
Apr $113.725 + $1.650
Jun $107.765 + $1.665
Aug $106.450 + $1.300
Oct $108.075 + 0.575
Dec $110.125 + $1.125

 

Corn  July 10 Change
Jly  $3.404 – $0.020
Sep $3.372 – $0.062
Dec $3.446 – $0.088
Mar ’21 $3.550 – $0.100
May $3.612 – $0.094
Jly $3.662 – $0.084

 

Oil CME-WTI July 10 Change
Aug $40.55 –  $0.10
Sep $40.76 -0-
Oct $40.94 + $0.03
Nov $41.10 + $0.08
Dec $41.25 + $0.14
Jan ’21 $41.40 + $0.22

 

Equities

Equity Indexes July 10 Change
Dow Industrial Average  26075.30 + 247.94
NASDAQ  10617.44 + 409.81
S&P 500   3185.04 +    55.03
Dollar (DXY)       96.66 –       0.57
July 12th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending July 2, 2020

Despite the continued decline in negotiated cash fed cattle prices and wholesale beef values, more optimism returned to Cattle futures, helping lift cash and feeder cattle prices. Keep in mind, the week was one day shorter due to observation of Independence Day.

Nationwide, steers and heifers sold steady to $2/cwt. higher, according to the Agricultural Marketing Service (AMS).

Except for an average of 12¢ lower in the back contract, Feeder Cattle futures closed an average of $1.05 higher to week on Thursday (65¢ to $1.62 higher in spot Aug).

Dry conditions continue to expand, though, impacting some marketing decisions. According to the U.S. Drought Monitor, 45.42% of the continental United States was ranked as abnormally dry to extreme drought for the week of July 2. That was 35.46% more than the same time last year.

AMS analysts note that cattle are coming to town off dry summer grass or out of grow yards in droughty areas of the Southern Plains and Northern Plains. They add that cows are starting to come to market in Wyoming and western Nebraska. The same goes for parts of Colorado, per other reports.

According to the most recent Crop Progress report for the week ending June 28, 42% of pasture and range was rated in Good or Excellent condition, which was 33% less than the same time a year earlier. 26% was rated in Poor or Very Poor condition, compared to 7% at the same time last year.

Feed costs also took on a more bearish tone last week with USDA’s lower estimate for corn acres. 

Corn acreage is projected at 92.01 million acres, in last week’s Acreage report. That would be 2.31 million acres more (+2.57%) than last year. However, the projection is about 5 million acres less than the initial outlook in USDA’s Prospective Plantings report that came out at the end of March. Acreage harvested for grain is forecast at 84.02 million acres, which would be 2.70 million acres more (+3.32%) than last year.

Corn futures closed an average of 24¢ higher through the front six contracts week to week on Thursday.

“The higher expected corn price has to enter into the decision making process for cattle feeders as they bid on feeder cattle,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This one report does not mean the expected corn price will remain elevated moving through the next 12 months, but it does put another component of the overall cattle industry back into play.

“At the same time, cow-calf and stocker producers may have to reconsider their grain supplement plan if it is highly dependent on purchasing corn. The one bright side for many parts of the country is that precipitation has been adequate if not abundant, which continues to support forage production.”

Cull cow prices remain a relative bright spot, according to Josh Maples, Extension livestock economist at Mississippi State University. In the latest issue of In the Cattle Markets he explains slaughter cow prices in the Southern Plains averaged $57.84/cwt. over the past six weeks of available data, which is 19.5% above the same period in 2019.

Total cow slaughter so far this year is about par with 2019, with beef cow slaughter up about 2% and dairy cow slaughter down about 2%, according to Maples.

Fed Cattle Prices Steady to Lower

Negotiated cash fed cattle trade ended the holiday-shortened week steady to $2 lower on a live basis in the Southern Plains at $93-$95/cwt.; steady to $1 higher in Nebraska at $95-$96 and unevenly steady in the western Corn Belt at $96-$97. Dressed trade was $1 lower in Nebraska at $154-$155 and steady to $4 lower in the western Corn Belt at $152-$155.

Live Cattle futures closed an average of $2.38 higher week to week on Thursday ($1.37 higher to $3.32 higher in spot Aug).

Choice boxed beef cutout value was $2.82 lower week to week on Thursday at $205.44/cwt. Select was $1.17 lower at $198.76.

“With larger production available, packing plants continue to refill the pipeline and increase beef items to consumers,” say AMS analysts. “Beef and pork will have to find price levels to clear record production that will persist for several months.”

Although recent holidays supported beef demand, Griffith notes it was muted, compared to normal times, as the pandemic and social unrest kept some consumers closer to home. He adds that most beef product still must flow through the retail channel as many restaurants remain limited to drive-thru, curbside pickup and limited seating capacity.

“At the same time, sales that would have occurred at ball games or during vacation are practically non-existent,” Griffith says. “While all of this is happening, one also has to consider discretionary spending. Many consumers’ incomes have declined the past several months, which leaves them with few dollars to spend, which could mean less beef for some. Labor Day will wrap up the summer grilling season, and it may be the benchmark to know how the market is fairing.”

Friday to Friday Change

 

Weekly Auction Receipts

 

July 2* Auction Direct

Video/net

Total
 

79,600

(-76,300)

33,600

(-21,400)

15,900

(-44,700)

129,100

(-142,400)

*Reflects volume for Monday through Thursday.

 

CME Feeder Index

CME Feeder Index* July 1 Change
  $129.05 –   $0.77

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash July 2 Change
600-700 lbs. $148.12 –   $7.93
700-800 lbs. $136.42 –   $6.82
800-900 lbs. $134.12 +   $1.89

 

South Central

Steers-Cash July 2 Change
500-600 lbs. $151.47 + $0.78
600-700 lbs. $143.31 + $1.72
700-800 lbs. $134.06 + $0.92

 

Southeast

Steers-Cash July 2 Change
400-500 lbs. $145.74 –  $0.99
500-600 lbs. $139.96 + $0.07
600-700 lbs. $132.15 + $0.81

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) July 2 ($/cwt) Change
Choice $205.44 –  $2.82
Select $198.76 –  $1.17
Ch-Se Spread $6.682 –  $1.65

 

Futures

Feeder Cattle  July 2 Change
Aug $134.875 + $1.625
Sep $135.850 + $1.350
Oct $136.700 + $1.250
Nov $137.350 + $0.775
Jan ’21 $137.075 + $0.650
Mar $136.825 + $0.775
Apr $137.950 + $0.925
Aug $137.450 –  $0.125

 

Live Cattle   July 2 Change
Aug $99.400 + $3.325
Oct $102.675 + $3.025
Dec $105.925 + $2.375
Feb ’21 $109.750 + $2.400
Apr $112.075 + $2.275
Jun $106.100 + $2.300
Aug $105.150 + $2.000
Oct $107.500 + $1.375
Dec $109.000 n/a

 

Corn  July 2 Change
Jly  $3.424 + $0.252
Sep $3.434 + $0.230
Dec $3.534 + $0.254
Mar ’21 $3.650 + $0.256
May $3.706 + $0.234
Jly $3.746 + $0.212

 

Oil CME-WTI July 2 Change
Aug $40.65 + $1.93
Sep $40.76 + $1.85
Oct $40.91 + $1.83
Nov $41.02 + $1.76
Dec $41.11 + $1.68
Jan ’21 $41.18 + $1.61

 

Equities

Equity Indexes July 2 Change
Dow Industrial Average  25827.36 +  81.76
NASDAQ  10207.63 + 190.63
S&P 500   3130.01 +  46.25
Dollar (DXY)       97.23 –       0.16
July 12th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending June 26, 2020

Cash fed cattle prices continued to soften last week as beef production increases and uncertainty grows, relative to how soon the U.S. economy can reopen. At the same time, calf and feeder cattle prices held their own.

Nationwide, steers and heifer sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). Those analysts note that the most advance came in the North Central region, with overall demand strongest for yearlings.

Except for an average of 11¢ lower in two contracts, Feeder Cattle futures closed an average of 51¢ higher to week on Friday.

“Calf prices will be hard-pressed to find support from now through November. At the same time, summer yearling cattle will be coming to market the next eight to 10 weeks. Prices for these cattle are generally strong during the summer months, which is largely due to cattle supply and when the cattle will be coming off feed, but it is also a factor of generally lower feed costs and good performance through summer and fall,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The problem this year is that placements of many cattle were delayed the past several months, which most likely means more animals to be placed in July, August, and September. This is further exacerbated by expectations of strong beef production moving through the third and fourth quarters of 2020, as well as the first quarter of 2021.”

Dry conditions and expanding drought will likely alter some marketing plans, too. According to the latest U.S. Drought Monitor (June 23), 43.74% of the continental U.S. was rated as abnormally dry (D0) to Extreme Drought (D3), versus 10.10% a year earlier.

Nationally, pasture and range conditions continue to erode, according USDA’s weekly Crop Progress report, with 43% of pasture and range rated in Good or Excellent condition for the week ending June 21. That was 2% less than the previous week and 25% less than last year. 25% was rated in Poor or Very Poor condition, compared to 8% at the same time last year.

“The fundamentals of the feeder cattle market provide little support to expect prices to move much in either direction,” Griffith says. “The failure of prices to reach beginning-of-the-year expectations will likely result in increased cow marketing and reduce the size of the breeding herd. This will result in positive price implications moving forward.”

Fed Cattle Prices Continue Decline

Negotiated cash fed cattle prices ended the week solidly lower, according to reports from the Agricultural Marketing Service. Regionally, live prices were $5-$7 lower in the Texas Panhandle at $93-$95, $5 less in Kansas at $95, $3-$7 lower in Nebraska at $95 and $1-$4 less in the western Corn Belt at $98. Dressed trade was $3-$7 less at $155-$156 in Nebraska and at $153-$156 in the western Corn Belt.

The five-area average direct fed steer price through Thursday was $96.24/cwt. on a live basis, which was $4.58 lower than the previous week and $14.34 less than the same period a year earlier. The average dressed steer price was $154.78, which was $5.96 less than the prior week and $24.58 less than a year earlier.

Except for unchanged to an average of 49¢ higher in the front four contracts, Live Cattle futures closed an average of 76¢ lower week to week on Friday.

“Finished cattle prices have converged to Live Cattle futures…The failure of the futures market to bend in the slightest is not a good sign for summer cattle marketing,” Griffith explains. “The June contract is rolling off, which makes the August contract the next destination, and it is trading ever so slightly higher than the June contract. The answer to this market turning around will most likely show up in finished cattle weights. Once finished cattle weights begin to decline, the price for finished cattle will find support. The reason a decline in finished weight will be the turnaround is because it will mark when we are finished working through the backlog of cattle.”

Wholesale Beef Values Lose Ground

Continued delays in the return of food service demand for beef—tied to ongoing closures and reduced restaurant capacity forced by COVID-19—and the recently higher retail beef prices continue to pressure wholesale beef values.

Choice boxed beef cutout value was $6.55 lower week to week on Friday at $207.17/cwt. Select was $5.06 lower at $198.85. Prices at the same time a year ago were $219.70 and $198.56, respectively.

“Wholesale boxed beef prices have dropped nearly back to pre-COVID-19 levels and may go lower into mid-summer as abundant third-quarter beef production could highlight potential recessionary demand weakness,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-week market comments.

Even as cattle slaughter continues to recover from disruptions wrought by the pandemic, the backlog of fed cattle continues to add days on feed and pounds per carcass.

Year to date, Peel notes steer and heifer carcass weights averaged 27.4 lbs. heavier year over year. Carcasses were an average of 20.4 lbs. heavier in the first quarter; 36.7 lbs. heavier for April 1 to June 6.

USDA estimated total cattle slaughter for last week at 680,000 head, which would be 3.7% more than the previous week and 1.5% more than the same week last year. Total beef production under federal inspection was estimated at 562.3 million lbs., which would be 3.9% more than the previous week and 5.3% more than the same week last year.

“The expectation is that production in the third and fourth quarters of 2020 will far exceed beginning-of-the-year projections, “Griffith says. “The January World Agricultural Supply and Demand Estimates (WASDE) projected third and fourth-quarter beef production to be 6.88 and 6.93 billion lbs., respectively. The June report projected third and fourth-quarter beef production at 6.92 and 6.83 billion pounds, respectively. Essentially, the WASDE report indicates little to no change in production over the next six months, but heavier carcasses and maintaining current slaughter rates should result in year-over-year increases in beef production.”

For January through May, 7.4% fewer fed steers and heifers were slaughtered, while federally inspected beef production was only 3.4% less, according to USDA’s monthly Livestock Slaughter report. That was with 0.8% less total cow slaughter.

 

Friday to Friday Change

 

Weekly Auction Receipts

 

June 26 Auction Direct

Video/net

Total
 

155,900

(-4,500)

55,500

(+8,500)

60,600

(+50,900)

271,500

(+54,900)

 

CME Feeder Index

CME Feeder Index* June 25 Change
  $130.04 +   $2.03

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 26 Change
600-700 lbs. $156.05 +   $3.19
700-800 lbs. $143.24 +   $5.99
800-900 lbs. $132.23 +   $3.85

 

South Central

Steers-Cash June 26 Change
500-600 lbs. $150.69 + $2.47
600-700 lbs. $141.59 + $0.99
700-800 lbs. $133.14 + $1.34

 

Southeast

Steers-Cash June 26 Change
400-500 lbs. $146.73 –  $1.02
500-600 lbs. $139.89 + $0.31
600-700 lbs. $131.34 + $0.78

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 26 ($/cwt) Change
Choice $207.17 –  $6.55
Select $198.85 –  $5.06
Ch-Se Spread $8.32 –  $1.49

 

Futures

Feeder Cattle  June 26 Change
Aug $132.600 + $0.050
Sep $133.775 –  $0.100
Oct $134.725 –  $0.125
Nov $135.675 + $0.100
Jan ’21 $135.225 + $0.375
Mar $134.300 + $0.300
Apr $135.275 + $0.600
Aug $136.650 + $1.650

 

Live Cattle   June 26 Change
Jun $94.700 -0-
Aug $95.400 + $0.625
Oct $98.850 + $0.625
Dec $102.850 + $0.225
Feb ’21 $107.275 –  $0.525
Apr $109.875 –  $1.025
Jun $103.650 –  $0.775
Aug $103.050 –  $0.725
Oct $105.900 –  $0.750

 

Corn  June 26 Change
Jly  $3.170 – $0.154
Sep $3.192 – $0.180
Dec $3.252 – $0.200
Mar ’21 $3.366 – $0.200
May $3.444 – $0.186
Jly $3.510 – $0.166

 

Oil CME-WTI June 26 Change
Aug $38.49 –  $1.34
Sep $38.65 –  $1.28
Oct $38.80 –  $1.22
Nov $38.94 –  $1.16
Dec $39.07 –  $1.12
Jan ’21 $39.19 –  $1.08

 

Equities

Equity Indexes June 26 Change
Dow Industrial Average  25015.55 –  855.91
NASDAQ    9757.22 –  188.90
S&P 500   3009.05 –    88.69
Dollar (DXY)       97.50 –       0.16
June 28th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending June 19, 2020

Depending on weight and location, some classes of calves and feeder cattle came under pressure last week as dry conditions spread and the cash fed cattle market succumbed to the backlog of market-ready cattle, declining wholesale beef values and iffy near-term domestic demand.

Nationwide, steers and heifers traded steady to $4/cwt. lower, according to the Agricultural Marketing Service (AMS).

Still, Feeder Cattle futures closed an average of $2.00 higher to week on Friday.

“The expectation is the market will remain under pressure through the end of fall as the industry works through large supplies of cattle and meat,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Cattle prices will start to gain a little momentum in the first quarter of 2021 before really accelerating in the second and third quarter of 2021…This is the expectation because it is likely more cows will be culled this year, as well as fewer heifers retained for breeding, due to lower cattle prices and the need for cash flow. Thus, the increased marketings in the short run will place added pressure on prices while at the same time providing support for prices moving into the longer run.”

Based on recent price data, USDA’s Economic Research Service (ERS) increased the projected annual average feeder steer price (basis Oklahoma City) by almost $7, compared to the previous month, to $131.40/cwt.

“With higher anticipated fed cattle slaughter in 2020, feedlot marketings will increase. A faster pace of marketings and higher forecast fed cattle prices than last month will likely improve feedlot demand for feeder cattle,” say ERS analysts, in the latest monthly Livestock, Dairy and Poultry Outlook.

Heading into this week, the market could see added pressure from the monthly Cattle on Feed report, which will likely be viewed as at least somewhat bearish.

Compared to average expectations ahead of the report, more cattle were placed, fewer were marketed and slightly more were on feed at the beginning of the month. That’s for feedlots with 1,000 head or more capacity.

Placements in May of 2.04 million head were 26,000 head fewer (-1.26%) than the previous year.

Marketings in May of 1.5 million head were 570,000 head fewer (-27.54%) than a year earlier and the least marketings for the month since the data series began in 1996.

There were 11.67 million head on feed June 1, which was 57,000 head fewer (-0.49%) than a year earlier. That’s the second highest June inventory since the data series began in 1996.

Moreover, expanding dryness could hamper intentions and prices as the summer unfolds.

According USDA’s weekly Crop Progress report (week ending June 14), 45% of nation’s pasture and range was rated in Good (39%) or Excellent (6%) condition. That’s 26% less than last year. 22% was rated in Poor (14%) or Very Poor (8%) condition, compared to 6% at the same time last year.

Fed Cattle Prices Lower

Through Thursday, the five-area direct weighted average price for steers was $100.82/cwt., which was  $4.02 less than the previous week. The average dressed steer price was $160.74, which was $5.91 less. Prices at the same time last year were at $110.43 and $180.56, respectively. Keep in mind that carcass weights are contra-seasonal and significantly heavier than last year.

The average dressed steer weight for the week ending June 6 was 892 lbs., which was 1 lb. heavier than the prior week and 46 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 824 lbs. was 2 lbs. lighter than the previous week, but 42 lbs. heavier than the prior year.

“The expectation was for finished cattle prices to decline but not $15/cwt. in three weeks,” Griffith says. “The lower prices speak volumes concerning the supply of market-ready cattle and the fact packers have plenty of cattle available to them. One would have thought there was price support at current prices and one can continue to think that based on this week’s prices, but there will continue to be pressure on finished cattle prices moving through the next couple of months. This is not a good sign for cattle feeders or those looking to market feeder cattle in the near term. It may take a while before optimism comes back to the finished cattle market.”

Other than $1.37 lower in spot Jun, Live Cattle futures closed an average of $1.13 higher week to week on Friday (7¢ to $1.65 higher).

Estimated total cattle slaughter for the week of 656,000 head was just 12,000 head fewer (-1.8%) than the same time last year, according to USDA.

The average five-area direct fed steer price in May was $111.53/cwt. on a live basis, which was more than 9% higher than in April, according to ERS. With that in mind, USDA increased its price forecast for fed steers in the second quarter by $3 to $104. Forecast prices for the third and fourth quarters increased by $6 to $105 and $106, respectively.

Wholesale Values Normalizing

Wholesale beef values continue lower with increased beef production.

Choice boxed beef cutout value was $16.92 lower week to week on Friday at $213.72/cwt. Select was $15.36 lower at $203.91.

“The red meat market has traversed some unfamiliar territory the past several months and probably still has a few new trails to cut before some form of normalcy is evident,” Griffith says. “The two broad markets the beef industry navigates are the domestic market and the international market. The international market is a major player in determining the full value of cattle produced domestically, which points to the importance of beef and cattle product exports. Through the first four months of 2020, beef and veal exports on a quantity basis were 7.0% greater than the same four months in 2019. However, beef and veal export value only increased 3.2% for January through April of 2020 compared to 2019. There is a good chance May 2020 beef and veal exports will have struggled compared to year-ago levels, given that May beef production was 19.2% lower than the same month one year ago.”

 

Friday to Friday Change

 

Weekly Auction Receipts

 

June 19 Auction Direct

Video/net

Total
 

160,400

(+100)

46,500

(+12,700)

9,700

(-36,300)

216,600

(+23,800)

 

CME Feeder Index

CME Feeder Index* June 18 Change
  $128.01 –   $1.57

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 19 Change
600-700 lbs. $152.86 –    $0.38
700-800 lbs. $137.25 –    $4.18
800-900 lbs. $128.38 –    $4.45

 

South Central

Steers-Cash June 19 Change
500-600 lbs. $148.22 –  $2.52
600-700 lbs. $140.60 –  $0.63
700-800 lbs. $131.80 –  $0.12

 

Southeast

Steers-Cash June 19 Change
400-500 lbs. $147.75 –  $1.43
500-600 lbs. $139.58 –  $2.57
600-700 lbs. $130.56 –  $1.80

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 19 ($/cwt) Change
Choice $213.72 –  $16.92
Select $203.91 –  $15.36
Ch-Se Spread $9.81 –  $1.56

 

Futures

Feeder Cattle  June 19 Change
Aug $132.550 + $1.450
Sep $133.875 + $1.400
Oct $134.850 + $1.700
Nov $135.575 + $2.100
Jan ’21 $134.850 + $2.400
Mar $134.000 + $2.650
Apr $134.675 + $2.300
Aug $135.000 + $2.025

 

Live Cattle   June 19 Change
Jun $94.700 –  $1.375
Aug $95.400 + $0.075
Oct $98.850 + $0.850
Dec $102.850 + $0.800
Feb ’21 $107.275 + $1.275
Apr $109.875 + $1.425
Jun $103.650 + $1.650
Aug $103.050 + $1.500
Oct $105.900 + $1.475

 

Corn  June 19 Change
Jly  $3.324 +$0.024
Sep $3.372 +$0.028
Dec $3.452 +$0.022
Mar ’21 $3.566 +$0.020
May $3.630 +$0.018
Jly $3.676 +$0.014

 

Oil CME-WTI June 19 Change
Jly $39.75 + $3.49
Aug $39.83 + $3.32
Sep $39.93 + $3.15
Oct $40.02 + $3.02
Nov $40.10 + $2.89
Dec $40.19 + $2.77

 

Equities

Equity Indexes June 19 Change
Dow Industrial Average  25871.46 + 265.92
NASDAQ    9946.12 + 357.31
S&P 500    3097.74 +   56.43
Dollar (DXY)       97.66 +      0.57
June 21st, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending June 12, 2020

Cash calf and feeder cattle prices were mixed last week, amid plenty of volatility in equity markets, declining wholesale beef prices and pressure on cash fed cattle.

Steers and heifers sold steady to $2/cwt. higher in the North Central region, but steady to $4 lower in the South Central and Southeast regions, according to the Agricultural Marketing Service (AMS).

“With the slaughter pace inching closer to normal and beef cutout values dropping, the focus may soon turn to the surplus of market ready cattle that history says will have to be whittled away at by getting to a price low enough to stimulate surplus demand (see below),” noted the AMS reporter on hand for Wednesday’s weekly sale at South Central Regional Stockyards in Vienna, MO.

Feeder Cattle futures closed an average of $2.94 lower to week on Friday.

“The fact that fresh-weaned calf prices are not declining speaks to strength in the market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Prices for lightweight calves typically reach their apex in March and then seasonally decline through the summer and fall months…The market did not experience its seasonal peak because coronavirus shut everything down.”

Griffith explains feeder cattle weighing less than 800 lbs. are garnering the most feedlot demand because lighter cattle offer more opportunity to work through the backlog of market-ready fed cattle.

Cow Culling Likely to Increase

Dry conditions and drought continue to expand, according to the latest U.S. Drought Monitor (June 11), with 38.6% of the continental U.S. rated as abnormally dry (D0) to Extreme Drought (D3), versus 10.6% a year earlier.

Much of the affected area ranges from Colorado west and up through the Northwest, as well as northern New Mexico, western Kansas and the Panhandles of Oklahoma and Texas.

A couple of year’s worth of anemic economic cow-calf returns, and now those dry conditions, continue to boost beef cow slaughter, helped along by stronger cull cow values.

According to AMS, year-to-date beef cow slaughter through May 31 (preliminary) is 1.5% more than a year ago and about 15% more than the previous five-year average. Keep in mind that cow slaughter the past couple of months was likely muted by disruptions in packing capacity.

Rather than the short and shallow liquidation phase many expected at the beginning of the year, it now appears a more conventional cyclical liquidation phase is in the cards.

Fed Cattle Prices Turn Sharply Lower

Through Thursday, the average five-area direct fed steer price (AMS) was $104.84 on a live basis, compared to $112.68 the previous week. The dressed steer price was $166.65, versus $179.17 the prior week.

Regionally, live prices were $3-$4 lower in the Southern Plains at $104/cwt. in the Texas Panhandle and at $103-$107 in Kansas. Live trade was $5-$10 lower in Nebraska at $105-$108; $5-$9 less in the western Corn Belt at $103-$105. Dressed trade was $10-$20 lower in Nebraska at $165; $13-$15 lower in the western Corn Belt at $160-$172.

“The available supply of market-ready cattle is high and the demand for cattle cannot physically exceed slaughter capacity. Thus, prices for finished cattle are softening and will remain soft until packers can work through the glut of market-ready cattle,” Griffith says. “This comes at a time when finished cattle prices are seasonally softening as the market moves toward the dog days of summer. How long the backup of cattle can hang over the market is not exactly known. It will depend on how well beef prices are doing and how many Saturdays are utilized. It may take until the fourth quarter of the year before cattle marketings are current.”

Other than $2.17 higher in spot Jun, Live Cattle futures closed an average of $2.04 lower week to week on Friday (85¢ to $2.87 lower at the back).

The average five-area direct live steer price (FOB) in May was $111.53/cwt., which was $9.51 more than the previous month, according to USDA. The average dressed steer price in the beef was $179.02 (delivered), which was $19.75 more than the previous month.

As mentioned in Cattle Current earlier this week, USDA’s Economic Research Service (ERS) increased price projections for this year’s average fed steer price by $4.50 to $108.60/cwt. In the latest monthly World Agricultural Supply and Demand Estimates (WASDE), ERS forecasts fed steer prices to average $106 in the second quarter, $104 in the third quarter and $106 in the fourth quarter. The first-quarter price was $118.32.

Retail Beef Prices Record High

Wholesale beef values continue to decline and normalize as packing capacity recovers.

Estimated cattle slaughter for the week was 658,000 head, according to USDA, which was 22,000 head more (+3.5%) than the previous week; 11,000 head fewer (-1.6%) than the same week last year. Estimated year-to-date cattle slaughter of 13.97 million head is 957,000 head fewer (-6.4%) than the same time a year ago. However, heavier carcass weights contributed to the fact that beef production for the week was 2.1% more than the same week last year at 542.2 million lbs.

Choice boxed beef cutout value was $30.84 lower week to week on Friday at $230.64/cwt. Select was $27.15 lower at $219.27.

Sky-high wholesale prices, especially from the second half of April and throughout May mean consumers will likely be paying higher prices for a while.

“Those high wholesale prices led to major changes in retail prices. Since the price series has been recorded, dating back more than 30 years, the all fresh retail price for beef hit a record high in May, coming in just under $7.05/lb.,” Griffith says. “This is $1.08 higher than the all fresh retail price of beef reported in March. Thus, retail beef prices increased 18% the past two months and that may not be the end. There is no doubt wholesale beef prices have moderated the past several weeks and will continue to do so. However, this does not mean retail prices will decline quickly. Retailers will be looking to recapture some of their losses from April and May, which means retail beef prices will remain elevated.”

Friday to Friday Change

 

Weekly Auction Receipts

 

June 12 Auction Direct

Video/net

Total
 

160,300

(-46,800)

33,800

(-53,600)

46,300

(+35,600)

240,400

(-64,800)

 

CME Feeder Index

CME Feeder Index* June 11 Change
  $129.58 +  $1.65

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 12 Change
600-700 lbs. $153.21 +   $1.18
700-800 lbs. $141.43 –    $0.03
800-900 lbs. $132.83 +   $2.41

 

South Central

Steers-Cash June 12 Change
500-600 lbs. $150.74 –  $3.49
600-700 lbs. $141.23 –  $1.92
700-800 lbs. $131.92 –  $0.80

 

Southeast

Steers-Cash June 12 Change
400-500 lbs. $149.18 –  $1.45
500-600 lbs. $142.15 –  $0.03
600-700 lbs. $132.36 –  $0.30

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) June 12 ($/cwt) Change
Choice $230.64 –  $30.84
Select $219.27 –  $27.15
Ch-Se Spread $11.37 –  $3.69

 

Futures

Feeder Cattle  June 12 Change
Aug $131.000 –  $3.175
Sep $132.475 –  $3.000
Oct $133.150 –  $2.925
Nov $133.475 –  $3.075
Jan ’21 $132.450 –  $2.800
Mar $131.350 –  $3.150
Apr $132.375 –  $2.800
Aug $132.975 –  $2.625

 

Live Cattle   June 12 Change
Jun $96.075 + $2.175
Aug $95.325 –  $0.850
Oct $98.000 –  $1.300
Dec $102.050 –  $1.775
Feb ’21 $106.000 –  $2.050
Apr $108.450 –  $2.300
Jun $102.000 –  $2.475
Aug $101.550 –  $2.750
Oct $104.425 –  $2.875

 

Corn  June 12 Change
Jly  $3.300 – $0.012
Sep $3.344 – $0.010
Dec $3.430 – $0.022
Mar ’21 $3.546 – $0.024
May $3.612 – $0.020
Jly $3.662 – $0.020

 

Oil CME-WTI June 12 Change
Jly $36.26 –  $3.29
Aug $36.51 –  $3.29
Sep $36.78 –  $3.25
Oct $37.00 –  $3.15
Nov $37.21 –  $3.07
Dec $37.42 –  $3.00

 

Equities

Equity Indexes June 12 Change
Dow Industrial Average  25605.54 –  1505.54
NASDAQ    9588.81 –   225.27
S&P 500    3041.31 –   152.62
Dollar (DXY)       97.09 +      0.14
June 14th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending June 5, 2020

“Barring a major setback, it appears that beef markets are moving past the worst of the disruptions that have caused upheaval in recent weeks,” said Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his early-weekly market comments.

Nationwide, steers and heifers sold from $1 lower to $2/cwt. higher, according to the Agricultural Marketing Service (AMS). Regional average calf and feeder cattle prices for the week were within spitting distance of year-over-year levels, the closest since the end of February, according to the National Weekly Feeder and Stocker Cattle Summary.

After $1.17 lower and 27¢ lower in the front two contracts, Feeder Cattle futures closed an average of 85¢ higher week to week on Friday (5¢ higher to $1.22 higher at the back).

Surging equity markets tied to the reopening of the nation’s economy provided overall support.

“It’s too soon to talk too much about markets returning to normal, but the steady improvements associated with the packing industry facing fewer obstacles is a relief (see below),” said Stephen Koontz, agricultural economist at Colorado State University, in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center.

From the lows of the year, Koontz points out: the five-area weighted average fed steer price is up about $15 at $115/cwt.; 7 to 8-weight feeder prices are up about $15 to $135; 4 to 5-weight calf prices are up about $8 to $170.

“There still remains several unanswered questions in the cattle market moving forward, but price levels for feeder cattle have improved to a point where producers were comfortable marketing some stock,” explained the AMS reporter on hand for Tuesday’s Kingsville Livestock Auction in Missouri, where calves sold steady to $6 lower and yearlings traded steady to $5 higher.

Fed Cattle Prices Sag Lower

Negotiated cash fed cattle prices were lower across a broad range last week. The weighted average five-area direct live steer price was $2.97 lower week to week on Thursday at $112.68/cwt. The dressed price was $4.13 lower at $179.17. Prices were $113.51 and $184.16 at the same time last year.

Live Cattle futures closed an average of $2.52 lower across the front five contracts week to week on Friday (37¢ lower to $5.82 lower in spot Jun) and then an average of 86¢ higher (20¢ higher to $1.22 higher).

Wholesale beef values continue to plunge, adjusting back to more normal fundamentals. Choice boxed beef cutout value was $101.86 lower week to week on Friday at $261.48/cwt. Select was $93.65 lower at $246.42.

Normalizing fundamentals have much to do with increased packing capacity that was significantly reduced by the pandemic.

“Cattle slaughter and beef production decreased on a year-over-year basis for four consecutive weeks. The lowest point occurred the last week of April when total cattle slaughter was down 34.8% year over year. Beef production that same week was down 33.8% compared to the same week one year ago,” Peel says. 

Since then, cattle harvest increased faster than many expected.

Total fed cattle slaughter for the week ending May 23 was 444,378 head, which was 51,816 head more (+13.2%) than the previous week and the most since the first week of April, according to USDA’s Actual Slaughter Under Federal Inspection report. Total cattle slaughter of 571,506 head was 52,383 head more (+10.1%) than the prior week and the most since the first week of April. Compared to the prior year, though, fed cattle slaughter was still 14.5% less and total cattle slaughter was 11.6% less.

Estimated cattle slaughter under federal inspection last week of 636,000 head was 112,000 head more (+21.3%) than the previous week.

“These slaughter numbers will determine when the cattle and beef markets return to more normal relationships,” Koontz says. “There are very large supplies and substantial inventory of long-fed cattle on feed. There has been a steady improvement in fed cattle and feeder cattle prices through last month and into the current. Continued improvement hinges on any further disruptions and steady elevation in slaughter numbers.”

The average dressed steer weight for the week of May 23 was 894 lbs., which was 6 lbs. lighter than the previous week, but 52 lbs. more than the same week a year earlier. The average dressed heifer weight of 826 lbs. was 5 lbs. less than the previous week, but 41 lbs. heavier than the prior year.

Exports Offer Continued Support

Despite the many and varied disruptions wrought by COVID-19, U.S. beef exports are higher year over year.

April beef exports were down 6% from a year ago to 98,613 metric tons (mt), with value falling 11% to $600.9 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). But, exports achieved outstanding growth in Japan, where U.S. beef is benefiting from reduced tariffs under the U.S.-Japan Trade Agreement. Exports also trended higher to China, following the late-March implementation of the U.S.-China Phase One Economic and Trade Agreement.

For January through April, beef exports totaled 433,316 mt, up 5% from a year ago, valued at $2.66 billion (up 3%).

“Considering all the challenges the U.S. red meat industry faced in April, export results were encouraging,” says Dan Halstrom, USMEF president and CEO. “Exporters lost several days of slaughter and processing due to COVID-19, and shipments to Mexico and some other Latin American markets declined due to slumping currencies and the imposition of stay-at-home orders. Despite these significant headwinds, global demand for U.S. beef and pork remained strong.”

Friday to Friday Change

 

Weekly Auction Receipts

 

June 5 Auction Direct

Video/net

Total
 

207,100

(+68,900)

87,400

(+45,400)

10,700

(-46,900)

305,200

(+67,400)

 

CME Feeder Index

CME Feeder Index* June 4 Change
  $127.93 –   $1.43

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash June 5 Change
600-700 lbs. $152.03