Weekly Market Highlights

Weekly Market Highlights 2017-06-02T12:10:16-05:00

Weekly Market Highlights

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Cattle Current Weekly Highlights—Week ending April 2, 2021

Higher cash fed cattle prices and the extraordinary surge in wholesale beef values helped Cattle futures maintain most of the previous week’s sharp gains, despite midweek pressure from surging grain prices.

Nationwide, steers and heifers sold $1-$4/cwt. higher, according to the Agricultural Marketing Service (AMS).

“As the major feedstocks for cattle were sharply higher, buyers wanted to procure more thinner fleshed cattle that will have compensatory gain instead of a fleshier one that will not feed very efficiently,” say AMS analysts.

Feeder Cattle futures closed narrowly mixed, week to week on Thursday, from 35¢ lower to 45¢ higher. During the same period, Corn futures closed an average of 16¢ higher through the front six contracts, elevated by a surprising USDA Prospective Plantings report (see below).

Prices for lightweight cattle should be nearing the seasonal peak, according to Andrew P. Griffith, agricultural economist at the University of Tennessee.

“There is certainly room for prices to push higher the next three to four weeks, but the momentum is expected to slow, and prices will turn the other direction as summer nears,” Griffith explains, in his weekly market comments. “The yearling cattle market has started to creep higher with the advent of a strengthening futures market. Summer and fall Feeder Cattle futures contracts made about $8 gains in March before being slowed by the USDA planting intentions and grain stocks reports.”

Grain Futures Spike Higher

U.S. producers intend to plant more acres to corn and soybeans this year than in 2020, according to the Prospective Plantings report. However, estimates were around significantly less than pre-report expectations for both crops.

Producers surveyed across the United States intend to plant an estimated 91.1 million acres of corn in 2021. That’s 325,000 more acres than last year, but about 2 million acres shy of expectations.

Soybean growers intend to plant 87.6 million acres in 2021, up 5% from last year, but about 2.5 million acres shy of pre-report expectations by private analysts. If realized, this will be the third highest planted acreage on record.

Corn and Soybean futures were limit up on Wednesday.

Griffith notes continued strength in Feeder Cattle futures, in the face of the grain friendly report suggests cattle producers expect corn and soybean prices to moderate.

“This is very likely in that the prices being projected for corn and soybeans should pull more acres into production,” Griffith says. “An increase in acreage should result in increased total production and thus lower prices. At this point, this is all speculation. What is known is that some extremely favorable prices for selling corn, soybeans, and feeder cattle can be captured today by using the futures market or forward contracting. The alternative to capturing these prices is doing nothing and simply crossing days off the calendar.”

Fed Cattle Prices Gain

By the end of the week, live prices were $2 higher in the Southern Plains at $117/cwt., $2 higher in Nebraska at mostly $118 (some up to $121) and $3-$4 higher in the western Corn Belt at $119-$120. Dressed trade was $5 higher at $190.

“Cattle feeders are slowly gaining leverage, and packers once again have several extra dollars to play with as beef prices increase,” Griffith says. “This does not mean packers will go down without a fight, but fed cattle prices will continue to creep higher the next several weeks. Live Cattle futures are pricing the June contract at nearly a $2.50 premium to April and August at a $1.50 premium. If this price pattern were to materialize, it would be a contra-seasonal price movement for finished cattle.”

Week to week on Thursday, Live Cattle futures closed an average of $1.04 higher (47¢ to $1.47 higher).

Significant strength in outside markets help bolster beef market optimism. Although investors are leery of increased inflation and interest rates, the increased rate of COVID-19 vaccinations and apparently bottomless government coffers continue to underpin equity markets. The Dow Jones Industrial Average was 533 points higher, week to week on Thursday. The NADASQ closed 502 points higher. The S&P 500 was up 110 points.

Wholesale Beef Prices Climb

Choice boxed beef cutout value was $15.19 higher week to week on Friday at $252.85/cwt. Select was $19.20 higher at $246.97. That’s $22.86 higher for Choice over the last two weeks; $27.02 higher for Select.

“The two drivers of higher beef prices are likely restaurants increasing dining capacity and consumers continuing to use discretionary spending on their eating experience, since many do not feel comfortable traveling yet,” Griffith explains. “How these factors change as an increasing number of Americans get a coronavirus vaccine will be determined in coming months. Another boost to the beef market will be the return of fans to baseball stadiums. Stadiums may not be filled to capacity, but those who are there will likely be eating hamburgers and beef hotdogs.”

 

Week to Week Change

Weekly Auction Receipts

Apr. 5 Auction Direct

Video/net

Total
 

193,300

(-7,900)

57,100

(+14,700)

6,600

(-26,300)

257,000

(-19,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Apr. 1 Change
  $140.63 +  $3.88

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 5 Change
600-700 lbs. $164.06 +  $4.07
700-800 lbs. $148.25 +  $0.61
800-900 lbs. $140.02 +  $1.36

South Central

Steers-Cash Apr. 5 Change
500-600 lbs. $168.69 +  $3.36
600-700 lbs. $155.00 +  $3.48
700-800 lbs. $142.00 +  $2.38

Southeast

Steers-Cash Apr. 5 Change
400-500 lbs. $165.92 +  $2.95
500-600 lbs. $153.19 +  $1.55
600-700 lbs. $142.27 +  $3.23

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr. 2 ($/cwt) Change
Choice $252.85 + $15.19
Select $246.97 + $19.20
Ch-Se Spread $5.88 –  $4.01

 

Futures

Feeder Cattle  Apr. 1 Change
Apr $143.875 –  $0.350
May $149.225 + $0.100
Aug $158.000 –  $0.125
Sep $158.625 + $0.125
Oct  $159.150 + $0.250
Nov $159.300 + $0.450
Jan ’22 $157.500 + $0.400
Mar $155.050 –  $0.300

 

Live Cattle   Apr. 1 Change
Apr $120.025 + $0.475
Jun $122.550 + $1.475
Aug $121.525 + $1.150
Oct $124.625 + $0.950
Dec $127.450 + $1.100
Feb ’22 $130.150 + $1.175
Apr $130.900 + $1.150
Jun $125.000 + $1.100
Aug $123.850 + $0.750

 

Corn  Apr. 1 Change
May $5.596 + $0.132
Jly $5.452 + $0.128
Sep $5.010 + $0.184
Oct $4.844 + $0.190
Mar ’22 $4.912 + $0.178
May $4.944 + $0.160

 

Oil CME-WTI Apr. 1 Change
May $61.45 + $2.89
Jun $61.48 + $2.91
Jly $61.35 + $2.95
Aug $61.04 + $2.97
Sep $60.62 + $2.96
Oct $60.17 + $2.95

 

Equities

Equity Indexes Apr. 1 Change
Dow Industrial Average  33153.21 +    533.73
NASDAQ  13480.11 +    502.43
S&P 500    4019.87 +     110.35
Dollar (DXY)         92.88 +         0.35
April 5th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending March 26, 2021

Negotiated cash fed cattle prices finally budged beyond their seven-week rut and wholesale beef values continued to make seasonal gains. Both helped support higher Cattle futures prices for the week. All of that and the fast approaching grass season helped calves and feeder cattle trade from steady to mainly higher, based on the weekly auctions monitored by Cattle Current.

Steers and heifers sold steady to $5/cwt. higher, except for $4-$7 higher in the Northern Plains, according to the Agricultural Marketing Service (AMS).

“Demand was good to very good as order buyers were aggressive at filling the needs of feedlot managers and backgrounders,” say AMS analysts. “The supply of lightweight cattle continues to be tight which is keeping that market red hot…”

“Calf and feeder cattle prices are attempting to push higher as grass fever heats up and as many Feeder Cattle futures contracts tested contract highs this week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee (UT), in his weekly market comments. “… Feeder Cattle futures are offering a great opportunity to hedge a strong price on cattle that will be marketed between August and November.”

Specifically, Griffith explains those contracts offer a 150 to 240-day  backgrounding period to capitalize on current prices, while offering a wide marketing window. In the meantime, he notes cool-season grasses are about two weeks ahead of schedule in the Southeast.

Feeder Cattle futures closed an average of $3.18 higher week to week on Friday (60¢ higher at the back to $5.70 higher in spot Apr).

The CME Feeder Cattle Index was $2.72 higher week to week on Thursday at $136.75.

“There is some concern by cattle producers that higher feed prices could put significant pressure on feeder cattle prices, but that is not a concern if one takes advantage of what the market is currently offering in the form of price risk management,” Griffith says.

Consolidating to lower Corn futures prices added optimism to cattle markets. Corn futures closed an average of 4.6¢ lower through the front six contracts, week to week on Friday.

“December corn is approaching a key support level of $4.60/bu.. If prices fall below $4.60, the next level of support will be $4.40,” says Aaron Smith, UT crops marketing specialist , in his weekly market comments. “Next week’s Prospective Plantings report (Mar. 31) could provide a major push (up or down) for corn prices depending on USDA estimates. Current estimates are 92 million acres of corn and 90 million acres of soybeans. The harvest price ratio of 2.6 still favors soybeans, but if weather cooperates, many farmers may plant corn. Heading into the report, having some production priced should be strongly considered, as historically, this report has moved markets.”

Cash Fed Cattle Prices Increase

Negotiated cash fed cattle prices were $1-$2 higher last week at $115/cwt. in the Southern Plains and $116 in the Northern Plains, according to  AMS. Dressed trade was $2-$3 higher in Nebraska at $185. Trade was yet to be established in the western Corn Belt, according to AMS, but various reports suggested trade in the region at as much as $3 higher than the previous week.

Week to week on Friday, Live Cattle futures closed an average of $2.08 higher (75¢ higher at the back to $3.10 higher).

“The slight progression in prices this week provide optimism for further price improvement moving through April and into May. The market continues to trade at a large discount to April Live Cattle futures, but cash prices for finished cattle have the ability to push above the $120 price level,” Griffith says.

Meanwhile, wholesale beef prices are making seasonal strides higher.

Choice boxed beef cutout value was $7.67 higher week to week on Friday at $237.66/cwt. Select was $7.82 higher at $227.77.

Plus, optimism continues to grow for the steady pace of COVID-19 vaccinations to continue bringing back some normalcy to markets and everyday life.

“There is considerable optimism for fed cattle markets going forward, beginning in the second quarter and especially in the second half of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “…Feedlots have been somewhat front-loaded thus far in 2021 which has contributed to the sluggish fed cattle markets in the first quarter of the year. Feedlot supplies should tighten in the second half of the year after working through current inventories.”

Friday to Friday Change

Weekly Auction Receipts

Mar. 29 Auction Direct

Video/net

Total
 

201,200

(+36,800)

42,400

(-19,200)

32,900

(+29,200)

276,500

(+46,800)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 25 Change
  $136.75 +  $2.72

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 29 Change
600-700 lbs. $159.99 +  $7.22
700-800 lbs. $147.64 +  $5.70
800-900 lbs. $138.66 +  $4.65

South Central

Steers-Cash Mar. 29 Change
500-600 lbs. $165.33 +  $1.43
600-700 lbs. $151.52 +  $2.94
700-800 lbs. $139.62 +  $1.55

Southeast

Steers-Cash Mar. 29 Change
400-500 lbs. $162.97 –   $0.12
500-600 lbs. $151.64 +  $1.87
600-700 lbs. $139.04 +  $1.57

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 26 ($/cwt) Change
Choice $237.66 + $7.67
Select $227.77 + $7.82
Ch-Se Spread $9.89 –  $0.15

 

Futures

Feeder Cattle  Mar. 26 Change
Apr $145.125 + $5.700
May $149.875 + $5.200
Aug $158.450 + $3.525
Sep $158.825 + $3.000
Oct  $159.050 + $2.700
Nov $159.000 + $2.400
Jan ’22 $157.350 + $2.350
Mar $155.600 + $0.600

 

Live Cattle   Mar. 26 Change
Apr $120.100 + $1.700
Jun $121.175 + $3.100
Aug $120.875 + $3.100
Oct $124.125 + $2.625
Dec $126.575 + $2.375
Feb ’22 $129.125 + $2.000
Apr $129.850 + $1.750
Jun $124.150 + $1.350
Aug $122.900 + $0.750

 

Corn  Mar. 26 Change
May $5.524 –  $0.052
Jly $5.356 –  $0.030
Sep $4.836 –  $0.058
Oct $4.664 –  $0.050
Mar ’22 $4.746 –  $0.046
May $4.796 –  $0.044

 

Oil CME-WTI Mar. 26 Change
May $60.97 –  $0.47
Jun $60.96 –  $0.35
Jly $60.76 –  $0.25
Aug $60.40 –  $0.17
Sep $59.93 –  $0.12
Oct $59.42 –  $0.08

 

Equities

Equity Indexes Mar. 26 Change
Dow Industrial Average  33072.88 +     444.91
NASDAQ  13138.72 –        76.52
S&P 500    3974.54 +       61.44
Dollar (DXY)         92.72 +         0.80
March 28th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending March 19, 2021

Calves and feeder cattle continued to trade mixed last week, but mainly higher, with the strongest demand for grass cattle once again.

Nationwide, steers and heifers sold mostly steady to $5/cwt. higher, with instances of $6-$8 higher, according to the Agricultural Marketing Service (AMS).

“Buyers pursued all classes of feeder cattle, despite high feed cost,” say AMS analysts. “The supply of feeders weighing 600-950 lbs. is much greater, with backgrounded steers and heifers, and saw moderate to good demand, especially for those with good weighing conditions.”

AMS analysts also note auction receipts were lighter in the Midwest and Northern Plains last week as some auctions transition to a semi-monthly schedule and as the late winter storm hampered some cattle movement.

High corn prices and stagnant cash fed cattle prices helped pressure Cattle futures last week, although fundamentals suggest markets are on the cusp of moving higher.

“After the fed cattle market works through ample cattle supplies in the first half of the year, beef production is expected to decrease year over year in the second half of the year. Live Cattle futures for the fall suggest higher fed cattle prices in the last half of the year,” says, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Similarly, Peel points to the premium for fall Feeder Cattle futures, compared to nearby contracts, explaining that summer stocker prospects are promising at this point in time.

“Feeder steer prices for February 2021 averaged $131.82/cwt. for steers weighing 750-800 lbs., sold at Oklahoma National Stockyards, just over $6 above a year ago,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook. “However, prices for the first two weeks of March are almost $8 above the same month last year.”

ERS increased the expected first-quarter average for feeder steers by $1 to $133/cwt. Price projections were unchanged for the remainder of the year: $134 in the second quarter; $139 in the third quarter; $140 in the fourth quarter; $136.50 for the 2021 average.

In the meantime, Feeder Cattle futures gave back a majority of the previous week’s gains, closing an average of $1.89 lower week to week on Friday (90¢ lower toward the back to $3.80 lower toward the front).

Week to week on Friday, Corn futures closed an average of 14¢ higher in the front two contracts (old crop) and then an average of about 7¢ lower through the next four.

Fed Cattle Prices Show Some Give

Negotiated cash fed cattle prices last week were steady on a live basis at $114/cwt. in Kansas, steady to $1 higher in Nebraska at $114, $1-$2 higher in the western Corn Belt at $114-$115. Prices were a touch higher than steady in the Texas Panhandle, with the Texas Cattle Feeders Association reporting $114.24 for steers and $114.30 for heifers. Dressed trade was $2 higher in Nebraska and $2-$4 higher in the western Corn Belt at $182.

“Live steer prices in the five-area marketing region are nearly flat since the first week of February, hovering around $114/cwt., despite a strong rally in the comprehensive cutout to near-record levels for the month of February,” explain ERS analysts. “An abundant supply of fed cattle on feed over 150 days Feb. 1 that is greater than the same time last year, along with the inability to process a portion of those cattle due to the winter storm system in February, likely did not support higher prices in line with typical seasonal patterns.”

Week to week on Friday, Live Cattle futures closed an average of $1.26 lower (35¢ lower at the back to $2.20 lower).

“Cattle feeders have watched the Apr Live Cattle contract continue to struggle, unable to get to the $120.00 mark, as Apr is normally the high of the year, when supplies of market-ready cattle are the tightest,” say AMS analysts. “We have seen a very unusual premium in the Live Cattle Jun and Aug contracts for this time of year.”

Choice boxed beef cutout value was $4.12 higher week to week on Friday at $229.99/cwt. Select was 32¢ lower at $219.95.

“Boxed beef cutout values are finding a bottom and seeing strength, as the food service industry is expected to see more business, with expectations for restaurant industry sales to increase through spring into summer,” according to AMS analysts. As well, they point to expectations for increased retail demand heading into grilling season.

No COF Surprises

Cattle feeders placed 1.68 million head in February, according to the monthly Cattle on Feed report from USDA—for feedlots with 1,000 head or more capacity. That was 1.86% less than a year earlier and close to average expectations ahead of the report for a decline of 1.7%.

Recent winter storms that closed sale barns may have limited placements. On the other hand, current and expected wheat prices may elevate feedlot placements in March, as more producers with a dual-purpose winter wheat crop look to put it in the bin.

“…the expectation that relatively high wheat prices may discourage the grazing-out of small grains pastures and move more cattle into feedlots sooner than previously expected is anticipated to shift placements from the second quarter to the first quarter,” ERS analysts say. “As a result, some fed cattle marketings are expected to shift from the fourth quarter to the third quarter.”

Feedlot marketings in February of 1.73 million head were 43,000 head fewer (-2.42%) year over year. Expectations ahead of the report were for a decline of 2.6%.

“Because of the weather disruption, there is a temporal shift of expected steer and heifer marketings out of the first quarter to be marketed in the second quarter,” say ERS analysts.

Cattle on feed March 1 of 12.0 million head were 189,000 head more (+1.60%), the second highest inventory for the month since the data series began in 1996. Average pre-report expectations were for an increase of 1.5%.

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 22 Auction Direct

Video/net

Total
 

164,400

(-138,800)

61,600

(+2,700)

3,700

(-6,500)

229,700

(-164,300)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 18 Change
  $134.03 –   $0.10

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 22 Change
600-700 lbs. $152.77 –   $1.64
700-800 lbs. $141.94 +  $0.09
800-900 lbs. $134.01 +  $3.06

South Central

Steers-Cash Mar. 22 Change
500-600 lbs. $163.90 +  $0.90
600-700 lbs. $148.58 +  $0.23
700-800 lbs. $138.07 +  $1.48

Southeast

Steers-Cash Mar. 22 Change
400-500 lbs. $163.09 +  $0.22
500-600 lbs. $149.77 +  $1.15
600-700 lbs. $137.47 +  $1.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 19 ($/cwt) Change
Choice $229.99 + $4.12
Select $219.95 –  $0.32
Ch-Se Spread $10.04 + $4.44

 

Futures

Feeder Cattle  Mar. 19 Change
Mar $134.675 –   $1.675
Apr $139.425 –   $3.800
May $144.675 –   $3.700
Aug $154.925 –   $1.650
Sep $155.825 –   $1.325
Oct  $156.350 –   $0.975
Nov $156.600 –   $0.900
Jan ’22 $155.000 –   $1.100

 

Live Cattle   Mar. 19 Change
Apr $118.400 –   $0.600
Jun $118.675 –   $1.750
Aug $117.775 –   $2.000
Oct $121.500 –   $2.200
Dec $124.200 –   $1.700
Feb ’22 $127.125 –   $1.100
Apr $128.100 –   $0.900
Jun $122.800 –   $0.775
Aug $122.150 –   $0.350

 

Corn  Mar. 19 Change
May $5.576 + $0.186
Jly $5.386 + $0.102
Sep $4.894 –  $0.066
Oct $4.714 –  $0.072
Mar ’22 $4.792 –  $0.072
May $4.840 –  $0.062

 

Oil CME-WTI Mar. 19 Change
Apr $61.42 –  $4.19
May $61.44 –  $4.20
Jun $61.31 –  $4.05
Jly $61.01 –  $3.83
Aug $60.57 –  $3.62
Sep $60.05 –  $3.43

Equities

Equity Indexes Mar. 19 Change
Dow Industrial Average  32627.97 –      150.67
NASDAQ  13215.24 –      104.63
S&P 500    3913.10 –        30.24
Dollar (DXY)         91.74 +         0.06
March 21st, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending March 12, 2021

Calves and feeder cattle sold mixed at the weekly auctions monitored by Cattle Current last week, but mainly steady to higher in the Southeast.

Sluggish, stagnant negotiated cash fed cattle prices, tied to the abundant supply, and seasonally weaker wholesale beef prices continue to hamper markets. On the other hand, improving supply fundamentals after the first quarter and the potential for a demand bounce from COVID-19 economic stimulus are boosting confidence.

Passage of the federal government’s $1.9 trillion coronavirus relief funding added support to overall equity and commodity markets last week, along with growing optimism the nation’s vaccination program is paving the way toward economic recovery.

Week to week on Friday, Feeder Cattle futures closed an average of $2.42 higher ($1.25 higher at the back to $4.20 higher toward the front).

The CME Feeder Cattle Index was 72¢lower week to week on Thursday at $134.13.

“The number of stocker cattle buyers is increasing as warm weather has resulted in cool season perennial pastures starting to green and grow,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “This trend will continue the next several weeks as spring and summer grazing operations look to fill pastures with lightweight cattle that will be efficient on grass and that will be ready for the feedlot in late summer or early fall. The primary interest in cattle is the lightweight animals. Heavier feeder cattle that would be destined for the feedlot are not garnering as much interest.”

In the meantime, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out auction volumes will increase in the Southern Plains over the next few weeks as cattle grazing dual-purpose winter wheat pasture head to market.

“Another factor hanging over feeder markets is the dramatic rise in feed costs and feedlot cost of gain,” Peel says, in his weekly market comments. “The latest summary of the Kansas Focus on Feedlots data shows that feedlot cost of gain for closeouts in January was up 8.6% from the recent low in October. Feedlot cost of gain will continue to increase and reflect higher grain prices in the coming months. Feeder prices will continue to adjust in response higher feed prices as the year progresses.”

There was a brief, slight respite last week with Corn futures closing an average of 5.5¢ lower on Friday, through the front six contracts (2.6¢ to 12.8¢ lower).

“U.S. corn market prices continue to rise, largely driven by strong export demand and tight global supplies,” say analysts with USDA’s Economic Research Service (ERS), in the latest USDA Feed Outlook. “The average cash-spot corn-market prices for Central Illinois and the Gulf for February 2021 were $5.56/bu. and $6.24/bu., respectively. By comparison, the same prices in February 2020 were $3.75 and $4.29.”

ERS left the 2020-21 U.S. corn supply and use outlook unchanged in the latest monthly World Agricultural Supply and Demand Estimates (WASDE) released last week. The projected season-average farm price also was unchanged at $4.30/bu. 

Fed Cattle Prices Continue Steady

During the next several months, cattle feeders should begin wresting some long-held market leverage back from beef packers. Until then, packers are holding prices in check.

Negotiated cash fed cattle prices were steady last week at $114/cwt. in the Southern Plains, steady to $1 higher at $114 in Colorado, steady in Nebraska at $113-$114 and steady to $1 lower in the western Corn Belt at $112-$113. Dressed trade was steady in Nebraska at $180 and steady to $2 lower in the western Corn Belt at $178-$180.

Week to week on Friday, Live Cattle futures an average of $1.68 higher (87¢ to $2.70 higher) except for 2¢ lower in spot Apr.

“For six consecutive weeks, finished cattle have traded steady, with the 5-area weighted average price being in less than a $0.50/cwt. range,” Griffith says. “This screams packer leverage and complete control of the market in the short term. How long packers will maintain this leverage is not known. The supply information would indicate leverage shifting to cattle feeders fairly soon. However, it seems we do not always have complete information in this analysis. The April Live Cattle contract has declined $6 over a four-week period and the cash price is showing no signs of making a run to $120, much less to $126 where it peaked. A rally through the end of March will go a long way to positivity throughout the cattle complex.”

Fed steer price forecasts were unchanged in the latest WASDE at $113/cwt. for the first and second quarters, $114 in the third quarter and $119 in the fourth quarter for an annual average of $115.

Wholesale Beef Prices Soften

Choice boxed beef cutout value was $5.46 lower week to week on Friday at $225.87/cwt. Select was 58¢ lower at $220.27.

Griffith points out declining Choice prices the past couple of weeks, as well as the narrowing Choice-Select price spread are typically associated with January and February, rather than March.

“January and February tend to be the weakest demand months for beef, which depresses beef prices. Similarly, the shift in beef consumption during the winter months tends to be from middle meats to end meats, which results in the narrowing of the Choice-Select spread,” Griffith explains. “As the market moves through March, Choice beef prices tend to escalate more quickly than Select prices, because the market is gearing up for post-Easter demand and the grilling season.”

ERS analysts increased estimated beef production for this year by 40 million lbs. in the latest WASDE to 27.58 billion lbs.

“First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter,” according to ERS analysts. “Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements.”

Total red meat and poultry production was reduced 127 million lbs. to 107.47 billion lbs., with expected reductions in pork, broiler and turkey production.

Friday to Friday Change

Weekly Auction Receipts

Mar. 15 Auction Direct

Video/net

Total
 

303,200

(+20,400)

58,900

(+2,200)

31,900

(+19,000)

394,000

(+41,600)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 11 Change
  $134.13 –   $0.72

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 15 Change
600-700 lbs. $154.41 –   $0.60
700-800 lbs. $141.85 –   $1.19
800-900 lbs. $130.95 –   $2.49

South Central

Steers-Cash Mar. 15 Change
500-600 lbs. $163.00 –   $1.47
600-700 lbs. $148.35 +  $2.30
700-800 lbs. $136.59 +  $1.28

Southeast

Steers-Cash Mar. 15 Change
400-500 lbs. $162.87 –   $1.75
500-600 lbs. $148.62 –   $2.16
600-700 lbs. $136.32 –   $0.82

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 12 ($/cwt) Change
Choice $225.87 –  $5.46
Select $220.27 –  $0.58
Ch-Se Spread $5.60 –  $4.88

 

Futures

Feeder Cattle  Mar. 12 Change
Mar $136.350 +  $1.750
Apr $143.225 +  $4.200
May $148.375 +  $3.225
Aug $156.575 +  $2.850
Sep $157.150 +  $2.325
Oct  $157.325 +  $1.950
Nov $157.500 +  $1.850
Jan ’22 $156.100 +  $1.250

 

Live Cattle   Mar. 12 Change
Apr $119.000 –   $0.025
Jun $120.425 +  $2.425
Aug $119.775 +  $2.700
Oct $123.700 +  $2.250
Dec $125.900 +  $1.425
Feb ’22 $128.225 +  $1.325
Apr $129.000 +  $0.875
Jun $123.575 +  $1.075
Aug $122.500 +  $1.375

 

Corn  Mar. 12 Change
Mar ’21 $5.492 –  $0.128
May $5.390 –  $0.064
Jly $5.284 –  $0.056
Sep $4.960 –  $0.030
Oct $4.786 –  $0.028
Mar ’22 $4.864 –  $0.026

 

Oil CME-WTI Mar. 12 Change
Apr $65.61 –  $0.48
May $65.64 –  $0.28
Jun $65.36 –  $0.09
Jly $64.84 + $0.03
Aug $64.19 + $0.12
Sep $63.48 + $0.18

Equities

Equity Indexes Mar. 12 Change
Dow Industrial Average  32778.64 +  1282.34
NASDAQ  13319.87 +    399.72
S&P 500    3943.34 +       92.40
Dollar (DXY)         91.66 –            0.32
March 20th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending March 5, 2021

Except for steady to mostly higher in the Southeast, calves and feeder cattle sold mixed last week, based on auction sales monitored by cattle Current.

“Corn made another sharp gain on Tuesday and the recent volatility in that market along with the fact that cattle feeders have been unable to achieve higher prices for fed cattle made buyers conservative on some of the heavier yearlings,” explained the AMS market reporter on hand for Tuesday’s sale at Kingsville Livestock Auction in Missouri, where steers weighing 850-900 lbs. sold $5-$8 lower.

Worries about rising inflation rates and interest rates competed with optimism about pandemic recovery, fueling overall commodity and equity market uncertainty.

The CME Feeder Cattle Index was $4.06 lower week to week on Thursday at $134.85.

Week to week on Friday, Feeder Cattle futures closed an average of $1.94 higher (7¢ to $3.20 higher), except for an average of $3.81 lower in the front two contracts.

“Whiplash is running rampant through Feeder Cattle futures,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Since the start of 2021, March Feeder Cattle futures prices have traded in nearly a $15 range.

“The wide price swings were most evident in January, followed by a much narrower trading range in February. However, futures started March on a negative note, which means there will have to be a large swing to the upside for sellers to see any benefit on the cash market. Summer and fall Feeder Cattle futures contracts tend to rally out of March, but that does not mean much for the spring contracts. All eyes are on the finished cattle market to help determine where feeder cattle prices should be this spring. March-placed cattle generally come off feed in the August and September time period, which means the August Live Cattle market is a major determinant of current feeder cattle prices. If there is a Live Cattle price rally this spring, then that could result in cattle feeders being willing to bet on the come or bet on higher prices in the future, which may mean they will be willing to spend some of their profits to pay up for feeder cattle. The current market dynamics present a great example of why it is important to be an active cattle marketer compared to a passive marketer.”

Rising feed costs continue to hamper calf and feeder cattle prices, as well.

Week to week on Friday, Corn futures closed an average of 9¢ higher through the front six contracts, except for an average of 1¢ lower in near May and Jly.

Week to week on Friday, Soybean futures closed an average of 25¢ higher through the front six contracts.

USDA issues the monthly World Agricultural Supply and Demand Estimates Tuesday (Mar. 9), which hold the potential to add price volatility.

Fed Cattle Trudge Steady

Negotiated cash fed cattle prices continued in the steady rut last week, as packers exploited plentiful supplies and sold-ahead inventory. Plenty of folks also expect more wheat pasture cattle to move this month, given the current value of harvesting a dual-purpose winter wheat crop.

For the week, established trade was steady on a live basis at $114/cwt. in the Southern Plains and Northern Plains. Dressed trade in Nebraska was $2 lower at $180. The previous week, live sales in the western Corn Belt were at $114, with dressed trade at $182.

Week to week on Friday, Live Cattle futures closed an average of 97¢ higher (2¢ to $1.50 higher) except for an average of 70¢ lower in the front two contracts.

As mentioned in the last Cattle Current weekly summary, Kevin Good, vice president of industry relations and analysis at CattleFax sees this year as a tale of two halves.

“There are more cattle in the system early in 2021 with big supplies on feed and heavy weights, however the second part of the year will transition to tighter calf crops and tighter slaughter,” Good explained during the Feb. 24 CattleFax Outlook during the virtual 2021 Cattle Industry Convention Winter Reboot.

CattleFax projects total slaughter this year to be 33.5 million head, which would be 700,000 head more year over year. Average carcass weights are projected 4 lbs. lighter.  Beef production is projected 500 million lbs. more than 2020 to 27.6 billion lbs.

Choice boxed beef cutout value was $9.20 lower week to week on Friday at $231.33/cwt. Select was $8.88 lower at $220.85.

Friday to Friday Change

Weekly Auction Receipts

Mar. 8 Auction Direct

Video/net

Total
 

282,800

(+66,000)

56,700

(+10,600)

12,900

(-24,400)

352,400

(+52,200)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Mar. 4 Change
  $134.85 –   $4.06

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 8 Change
600-700 lbs. $155.01 –   $1.06
700-800 lbs. $143.04 –   $0.61
800-900 lbs. $133.44 –   $2.04

South Central

Steers-Cash Mar. 8 Change
500-600 lbs. $164.47 +  $0.01
600-700 lbs. $146.05 –   $1.14
700-800 lbs. $135.31 –   $3.06

Southeast

Steers-Cash Mar. 8 Change
400-500 lbs. $164.62 + $3.28
500-600 lbs. $150.78 + $2.41
600-700 lbs. $137.14 + $1.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 5 ($/cwt) Change
Choice $231.33 –  $9.20
Select $220.85 –  $8.88
Ch-Se Spread $10.48 –  $0.32

 

Futures

Feeder Cattle  Mar. 5 Change
Mar $134.600 –  $4.075
Apr $139.025 –  $3.550
May $145.150 +  $0.075
Aug $153.725 +  $1.775
Sep $154.825 +  $2.000
Oct  $155.375 +  $2.175
Nov $155.650 +  $2.425
Jan ’22 $154.850 +  $3.200

 

Live Cattle   Mar. 5 Change
Apr $119.025 –   $0.975
Jun $118.000 –   $0.425
Aug $117.075 +  $0.025
Oct $121.450 +  $0.825
Dec $124.475 +  $1.150
Feb ’22 $126.900 +  $1.325
Apr $128.125 +  $1.325
Jun $122.500 +  $1.500
Aug $121.125 +  $0.625

 

Corn  Mar. 5 Change
Mar ’21 $5.620 + $0.066
May $5.454 –  $0.020
Jly $5.340 –  $0.010
Sep $4.990 + $0.096
Oct $4.814 + $0.108
Mar ’22 $4.890 + $0.106

 

Oil CME-WTI Mar. 5 Change
Apr $66.09 + $4.59
May $65.92 + $4.69
Jun $65.45 + $4.71
Jly $64.81 + $4.69
Aug $64.07 + $4.61
Sep $63.30 + $4.49

Equities

Equity Indexes Mar. 5 Change
Dow Industrial Average  31496.20 +    563.93
NASDAQ  12920.15 –      272.19
S&P 500    3841.94 +       30.79
Dollar (DXY)         91.99 +           1.11
March 20th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Feb. 26, 2021

Based on the weekly auctions monitored by Cattle Current last week, demand was strongest for lighter cattle suitable for summer grazing.

“The strengthening prices at the local level are being spurred by two factors at this point. The primary driver of lightweight calf prices is grass fever. Grass is slowly beginning to green; some marginal growth is evident in fescue pastures, while cool season annuals should really take off over the next couple of weeks,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The strengthening price is not based on what grass is available but what is expected to be available. Thus, this is just the start of the price run as some producers are attempting to get a few cattle purchased before prices peak.”

Summer and fall Feeder Cattle futures are the other current price driver, according to Griffith.

“If the summer and fall contract months remain at current levels or push higher, then one can expect calf prices to continue to increase over the next six to eight weeks,” Griffith says. “There does appear to be some disconnect between Feeder Cattle futures and Corn futures, but there is no reason to try to outguess that disconnect. The key is to take advantage of what the market is offering and capitalize on prices in the near term.”

In the meantime, higher feed costs continue to challenge Feeder Cattle futures overall. They closed an average of $1.57 lower week to week on Friday, from 10¢ lower to $2.77 lower. 

Week to week on Friday, Corn futures closed an average of 8¢ higher through the front six contracts.

Week to week on Friday, Soybean futures closed an average of 25¢ higher through the front six contracts.

“Tight global stocks and export demand for grain, oilseeds, and cotton continue to drive prices higher,” says Aaron Smith, Extension crop marketing specialist at the University of Tennessee, in his weekly Crop Comments. “China has been the major purchaser of U.S. agricultural products, however demand from other countries has also been robust…Brazil’s soybean harvest continues to be two to three weeks behind normal pace, limiting exports of soybeans to global purchasers. The cold weather across the Southern Plains last week has many concerned that winter kill could affect hard red winter wheat production.”

CattleFax analysts expect cattle prices to improve significantly after markets wade through currently plentiful fed cattle supplies.

Second-Half Optimism

Kevin Good, CattleFax vice president of industry relations and analysis sees this year shaping up as a tale of two halves, with prices continuing to struggle through the first two quarters and then finding plenty of lift in the second half of the year.

During its Market Outlook Wednesday, as part of the National Cattlemen’s Beef Association Winter Reboot, Good explained leverage will begin swinging back in producers’ favor as packing plant capacity utilization declines with smaller cattle harvest supplies.

CattleFax projects modest herd liquidation of 200,000 beef cows this year and 350,000 head next year, due in part to the likelihood of expanding La Niña drought this spring and summer.

In terms of price expectations, CattleFax projects:

  • Annual average steer calf price (550 lbs.) at $170/cwt., with a range of $160-$180.
  • Annual average feeder steer price (800 lbs.) at $145 with a range of $135-$160.
  • Annual average fed steer price at $119 with a range of $108-$128.
  • Annual average utility cow price at $64 with a range of $52 to $74.                 
  • Annual average bred cow price at $1,600/hd with a range of $1,200 to $1,900.

At the same time, CattleFax expects consumer beef demand to continue strong.

According to Randy Blach, CattleFax CEO, domestic consumer beef demand last year was the strongest in more than 30 years, based on the U.S. Consumer Beef Demand Index. That was helped by consumer incomes being replaced almost entirely by government stimulus.

Internationally, CattleFax expects U.S. beef exports to increase at least 5% this year.

There are headwinds, of course.

Even before considering the drought, Mike Murphy, CattleFax vice president of research and risk management services, said both supply and demand mean feed costs will likely remain elevated into the next crop marketing year.

Fed Cattle Struggle for Steady

As it is, last week was a tooth-pulling contest for negotiated cash fed cattle prices to end up generally steady. Live trade was steady with the previous week in Nebraska and the Southern Plains at $114/cwt.; steady to $1 lower at $114 in the western Corn Belt. Dressed trade was steady to $2 higher at $182.

Week to week on Friday, Live Cattle futures an average of $1.65 lower, from 72¢ lower to $3.65 lower toward the front.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” explains Derrell Peel, Extension livestock marketing specialist, in his weekly market comments. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

Feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed report. That was about 3% more year over year.  

“This is a difficult environment to market finished cattle,” Griffith says. “Nothing seems to be in tune with normal tendencies. A negative basis of $2 to $3 is not unheard of in February, but it is also not that common. Cattle feeders will be hoping for cash and futures prices to converge moving into the April contract as convergence is advantageous to hedging strategies.”

Choice boxed beef cutout value was $1.30 higher week to week on Friday at $240.53/cwt. Select was $1.83 higher at $229.73.

Friday to Friday Change

Weekly Auction Receipts

Feb. 27 Auction Direct

Video/net

Total
 

216,800

(+139,200)

46,100

(+27,800)

37,300

(+35,400)

300,200

(+202,400)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 25 Change
  $138.911 +  $0.80

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 27 Change
600-700 lbs. $156.07 +  $0.92
700-800 lbs. $144.73 –   $0.71
800-900 lbs. $135.48 –   $1.94

South Central

Steers-Cash Feb. 27 Change
500-600 lbs. $164.46 +  $10.75
600-700 lbs. $147.19 –   $0.35
700-800 lbs. $138.37 +  $1.42

Southeast

Steers-Cash Feb. 27 Change
400-500 lbs. $161.34 + $7.83
500-600 lbs. $148.37 + $3.89
600-700 lbs. $135.87 + $2.27

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 26 ($/cwt) Change
Choice $240.53 + $1.30
Select $229.73 + $1.83
Ch-Se Spread $10.80 –  $0.53

 

Futures

Feeder Cattle  Feb. 26 Change
Mar $138.675 –  $0.450
Apr $142.575 –  $0.100
May $145.075 –  $0.650
Aug $151.950 –  $1.950
Sep $152.825 –  $2.175
Oct  $153.200 –  $2.350
Nov $153.225 –  $2.775
Jan ’22 $151.650 –  $2.150

 

Live Cattle   Feb. 26 Change
Feb $113.100 –  $2.825
Apr $120.000 –  $3.675
Jun $118.425 –  $2.100
Aug $117.050 –  $1.375
Oct $120.625 –  $0.725
Dec $123.325 –  $1.300
Feb ’22 $125.575 –  $1.000
Apr $126.800 –  $0.800
Jun $121.000 –  $1.100

 

Corn  Feb. 26 Change
Mar ’21 $5.554 + $0.128
May $5.474 + $0.058
Jly $5.350 + $0.020
Sep $4.894 + $0.078
Oct $4.706 + $0.106
Mar ’22 $4.784 + $0.108

 

Oil CME-WTI Feb. 26 Change
Apr $61.50 + $2.24
May $61.23 + $2.17
Jun $60.74 + $2.08
Jly $60.12 + $2.00
Aug $59.46 + $1.94
Sep $58.41 + $1.89

Equities

Equity Indexes Feb. 26 Change
Dow Industrial Average  30932.37 –      561.95
NASDAQ  13192.34 –      681.12
S&P 500    3811.15 –        95.56
Dollar (DXY)         90.93 +         0.57
February 28th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Feb. 19, 2021

Frigid, record-breaking temperatures, ice and snow across a wide swath of the nation slowed cattle movement and disrupted supply chains last week, especially in the Southern Plains.

With so many auctions closed last week, due to weather, and receipts reduced at others, it was tough to come up with much of a price trend. Based on the auctions monitored by Cattle Current, prices were mixed but generally steady to higher.

Optimism this week may be tempered as the nation thaws, with the potential for feedlots to slow marketing in efforts to recover some of the lost gain, and with more January placements than expected (see below).

Week to week on Friday, Feeder Cattle futures closed mixed, from an average of $1.45 lower in the front three contracts to an average of 57¢ higher. 

The CME Feeder Cattle Index was $2.77 higher week to week on Thursday at $138.11, the highest since December.

“There is optimism for feeder cattle to gain momentum, but much of this optimism is pushed towards the summer and fall feeder cattle market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Summer and fall Feeder Cattle contracts are trading at a clear $10 premium to spring contracts. Thus, the optimism is for five to six months in the future. Producers should keep an eye on the Feeder Cattle Index and deferred futures and price cattle accordingly.”

USDA’s Economic Research Service (ERS) lowered expectations for feeder steer prices, in the latest Livestock, Dairy and Poultry Outlook.

“Feeder steer prices for January 2021 averaged $133.94/cwt. for steers weighing 750-800 lbs. sold at Oklahoma City National Stockyards, about 7% below the average for January 2020. With prices for the first two weeks of February almost $7 below the same month last year, the first-quarter 2021 forecast was lowered $2 to $132/cwt.,” say ERS analysts. “Revisions to the 2020 calf crop tightened anticipated feeder cattle supplies in second-half 2021. However, higher expected feed costs offset expectations for stronger prices the rest of the year; as a result, the second-half 2021 feeder steer price forecasts are unchanged from last month.”

ERS forecasts the feeder steer price at $134/cwt. in the second quarter, $139 in the third and $140 in the fourth quarter for an annual average of $136.25. That would be only 80¢ more than the 2020 average.

Feedlot Placements Up

Traders may view the latest monthly Cattle on Feed report as somewhat bearish, with January placements of 2.017 million head. That was about 3% more year over year and about 3% more than pre-report expectations. The report accounts for feedlots with 1,000 head or more capacity.

“With higher placements in January, rising feed costs are likely to become more of a focus and concern,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “The weekly Omaha corn price for January averaged $5.04/bu., which is a 15.2% ($0.67 per bushel) rise over December 2020 and 32.0% ($1.23 per bushel) higher than last year. High feed costs may incentivize cow-calf operators to add more weight to calves before placing into feedlots. This may be a challenge as much of the western U.S. remains in drought, potentially limiting available pasture and feed supplies. The harsh winter weather in mid-February likely depleted hay stocks in some areas.”

Feedlot marketings in January of 1.822 million head were 5.6% less year over year and slightly fewer than expected.

Total cattle on feed Feb. 1 of 12.106 million head were 1.5% more than a year earlier and about 0.5% more than expectations. That’s the second most for the month since the data series began in 1996.

Fed Cattle Prices Mainly Steady

Negotiated cash fed cattle trade last week ended up steady in the Southern Plains at $114/cwt., according to the Agricultural Marketing Service. Live trades were steady to $1 higher in Nebraska at $114; dressed trade steady to $1 higher at $180-$181. In the western Corn Belt, prices were steady to $2 higher on a live basis at $114-$115 and steady to $2 higher in the beef at $180-$182.

Through Thursday, the five-area direct average steer price was $114.11/cwt. on a live basis, which was 33¢more than the previous week but $5.66 lower than the same week last year. The average five-area dressed steer price was 64¢ higher week to week at $180.71, which was $9.39 less year over year.

Week to week on Friday, Live Cattle futures closed mixed, from an average of $1.07 lower through the front five contracts to an average of 80¢ higher.

“The weather conditions many feedlot operators are navigating currently have a small impact on cattle soon to be marketed and a much larger impact on the rest of the animals,” Griffith explains. “The cold temperatures are sure to reduce average daily gain and increase feed intake. Thus, the higher cost of feed and fewer pounds to sell will negatively influence profitability. This does not mean those cattle will lose money, but profits will be smaller. Looking ahead, cattle feeders will be looking to gain some leverage from this situation moving into the spring to push prices north of $120.”

Wholesale Beef Prices Climb

Reduced slaughter last week, due to the weather, demonstrated once again the disparate forces of marginal demand: packer demand for fed cattle decreased, while retailers and food service competed harder for reduced beef production.

Choice boxed beef cutout value was $6.86 higher week to week on Friday at $239.23/cwt. Select was $6.97 higher at $227.90.

Estimated cattle slaughter for the week of 552,000 head was 56,000 head fewer than the previous week and 74,000 head fewer than the same week last year. Estimated year-to-date cattle slaughter of 4.50 million head is 263,000 head fewer (-5.52%) than last year. Estimated year-to-date beef production of 3.81 billion lbs. is 124.8 million lbs. less (-3.17%) than the same time last year.

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 20 Auction Direct

Video/net

Total
 

77,600

(-52,900)

18,300

(-22,800)

1,900

(-34,800)

97,800

(-110,500)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 18 Change
  $138.11 +  $2.77

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

Last available

North Central

Steers-Cash Feb. 15 Change
600-700 lbs. $151.50 +  $0.46
700-800 lbs. $140.64 –   $0.50
800-900 lbs. $134.59 +  $0.965

South Central

Steers-Cash Feb. 15 Change
500-600 lbs. $155.23 –   $4.37
600-700 lbs. $140.98 –   $3.69
700-800 lbs. $134.01 –   $1.17

Southeast

Steers-Cash Feb. 15 Change
400-500 lbs. $154.99 –   $5,42
500-600 lbs. $141.66 –   $3.05
600-700 lbs. $132.20 + $0.07

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 19 ($/cwt) Change
Choice $239.23 + $6.86
Select $227.90 + $6.97
Ch-Se Spread $11.33 –  $0.11

 

Futures

Feeder Cattle  Feb. 19 Change
Mar $139.125 –  $1.725
Apr $142.675 –  $2.050
May $145.725 –  $0.575
Aug $153.900 + $0.300
Sep $155.000 + $0.325
Oct  $155.550 + $0.425
Nov $156.000 + $0.725
Jan ’22 $153.800 + $1.100

 

Live Cattle   Feb. 19 Change
Feb $115.925 –  $1.275
Apr $123.675 –  $1.500
Jun $120.525 –  $0.775
Aug $118.425 –  $1.250
Oct $121.350 –  $0.575
Dec $124.625 + $0.520
Feb ’22 $126.575 + $1.000
Apr $127.600 + $1.150
Jun $122.100 + $0.550

 

Corn  Feb. 19 Change
Mar ’21 $5.426 + $0.040
May $5.416 + $0.052
Jly $5.330 + $0.080
Sep $4.816 + $0.094
Oct $4.600 + $0.114
Mar ’22 $4.676 + $0.122

 

Oil CME-WTI Feb. 19 Change
Mar $59.24 –  $0.23
Apr $59.26 –  $0.12
May $59.06 unchanged
Jun $58.66 + $0.06
Jly $58.12 + $0.07
Aug $57.52 + $0.06

 

Equities

Equity Indexes Feb. 19 Change
Dow Industrial Average  31494.32 +      35.92
NASDAQ  13874.36 –      221.11
S&P 500    3906.71 –        28.12
Dollar (DXY)         90.34 –          0.14
February 20th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Feb. 12, 2021

Based on weekly auctions monitored by Cattle Current, calves and feeder cattle traded mixed last week, supported by positive fundamentals but pressured by the frigid, icy weather that disrupted some markets.

Week to week on Friday, Feeder Cattle futures closed an average of $1.29 higher from 17¢ higher at the back to $2.57 higher at the front. Slightly softer Corn futures prices provided support.

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

The latest monthly World Agricultural Supply and Demand Estimates (WASDE), from USDA’s Economic Research Service increased the expected 2020-21 season-average corn price received by producers by 10¢ to $4.30/bu. 

“The futures price expectation for feeder cattle remains a bright spot, as the market appears to be strong in the summer and fall months for moving cattle into the feedlot,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Most feeder cattle contracts are holding near the contract highs. This does not mean they will stay there, nor does it mean the market price will increase or decrease. All it means at this point is that optimism remains in the feeder cattle market…There are still several weeks before spring forage growth hits full speed. Thus, there should still be several more weeks before lightweight calf prices peak. However, the cost of holding those calves for four to eight more weeks should be considered.”

Cash Fed Cattle Trade Steady to Higher

Negotiated cash fed cattle trade last week was steady in the Southern Plains at $114/cwt. on a live basis, $1-$2 higher in Nebraska at $113-$114 and steady to $1 higher in the western Corn Belt at $112-$115. Dressed trade was steady to $2 higher at $180.

Week to week on Friday, Live Cattle futures closed an average of 79¢ higher (45¢ to $1.40 higher).

“The cash price remains $2 lower than the February Live Cattle contract, and there are two weeks left to close the gap,” Griffith says. “The more optimistic part of the market is April Live Cattle trading near $125. The ability to reach or surpass this price level is dependent on beef demand. Beef supply may play a role as well if the extremely cold temperatures persist and result in reduced cattle performance in the feedlot.”

The average dressed steer weight the week ending Jan. 30 was 920 lbs., which was 6 lbs. lighter than the previous week but 23 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 853 lbs. was 2 lbs. heavier than the prior week and 20 lbs. heavier than the previous year.

USDA projects $115/cwt. for the annual average five-area direct fed steer price this year. Average prices are forecast at $113 in the first and second quarters, $114 in the third quarter and $119 in the fourth quarter.

Increased Beef Production Expected

Choice boxed beef cutout value was $2.21 lower week to week on Friday at $232.37/cwt. Select was 14¢ higher at $220.93.

Beef production for this year was estimated at 27.54 billion lbs., in the latest WASDE. That would be 388 million lbs. more (+1.43%) than last year.

Along with expected continued strong domestic beef demand, the latest U.S. beef export data suggests rebounding international markets.

Although U.S. beef exports were 5% lower last year, in volume (1.25 million metric tons—mt) and value ($7.65 billion), they finished 2020 with a near record December, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

December beef exports totaled 119,892 mt, up 8% from December 2019 and the largest in nearly 10 years. Export value in December was $744 million, up 9% from a year ago and the second highest total on record.

Foodservice restrictions in many major markets impacted beef exports significantly, but they trended higher late in the year, bolstered by very strong retail and holiday demand.

“Consumers across the world responded to the COVID-19 pandemic by seeking high-quality products they could enjoy at home, and U.S. beef and pork definitely met this need,” Says Dan Halstrom, USMEF president and CEO. “We expect these retail and home-delivery demand trends to continue even as sit-down restaurant dining recovers, creating robust opportunities for U.S. red meat export growth.”

“The weekly beef export muscle cut data for the first five weeks of 2021 are on par with the strong start in 2020, which bodes well for exporting beef and thus price support. However, the domestic beef market is the primary driver of the industry,” Griffith says.

Friday to Friday Change

Weekly Auction Receipts

Feb. 15 Auction Direct

Video/net

Total
 

130,500

(-94,600)

41,100

(+6,900)

36,700

(+25,800)

208,300

(-61,900)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 11 Change
  $135.34 –  $0.31

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 15 Change
600-700 lbs. $151.50 +  $0.46
700-800 lbs. $140.64 –   $0.50
800-900 lbs. $134.59 +  $0.965

South Central

Steers-Cash Feb. 15 Change
500-600 lbs. $155.23 –   $4.37
600-700 lbs. $140.98 –   $3.69
700-800 lbs. $134.01 –   $1.17

Southeast

Steers-Cash Feb. 15 Change
400-500 lbs. $154.99 –   $5,42
500-600 lbs. $141.66 –   $3.05
600-700 lbs. $132.20 + $0.07

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 12 ($/cwt) Change
Choice $232.37 –  $2.21
Select $220.93 + $0.14
Ch-Se Spread $11.44 –  $2.35

 

Futures

Feeder Cattle  Feb. 12 Change
Mar $140.850 + $2.575
Apr $144.725 + $2.525
May $146.300 + $1.525
Aug $153.600 + $1.250
Sep $154.675 + $1.200
Oct  $155.125 + $0.925
Nov $155.275 + $0.175
Jan ’22 $152.700 + $0.175

 

Live Cattle   Feb. 12 Change
Feb $117.200 + $0.475
Apr $125.175 + $1.400
Jun $121.300 + $1.325
Aug $119.675 + $1.175
Oct $121.925 + $0.775
Dec $124.100 + $0.550
Feb ’22 $125.575 + $0.475
Apr $126.450 + $0.450
Jun $121.550 + $0.450

 

Corn  Feb. 12 Change
Mar ’21 $5.386 –  $0.098
May $5.364 –  $0.110
Jly $5.250 –  $0.112
Sep $4.772 –  $0.060
Oct $4.486 –  $0.030
Mar ’22 $4.554 –  $0.032

 

Oil CME-WTI Feb. 12 Change
Mar $59.47 + $2.62
Apr $59.38 + $2.68
May $59.06 + $2.66
Jun $58.60 + $2.59
Jly $58.05 + $2.49
Aug $57.46 + $2.39

 

Equities

Equity Indexes Feb. 12 Change
Dow Industrial Average  31458.40 +     310.16
NASDAQ  14095.47 +     239.17
S&P 500    3934.83 +      48.00
Dollar (DXY)         91.45 –          0.55
February 14th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Feb. 5, 2021

Based on weekly auctions monitored by Cattle Current, calves and feeder cattle sold mixed last week, with overall demand strongest for lighter weights that can be steered to summer grass programs.

More specifically, calves and feeder cattle sold from $2/cwt. lower to $2 higher at auctions in the North Central and South Central regions last week, according to the Agricultural Marketing Service (AMS). Prices were $1 to $4 higher in the Southeast.

“Lightweight calf prices are beginning to catch fire, even before there are any signs of spring greening. This bodes well for the calf market moving through February and March,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The higher calf prices would indicate that stocker producers believe feeder cattle prices will be much stronger moving through the summer months, which is exactly what futures traders are banking on right now. With two months of grass cattle buying ahead of the market, there is ample time for 500 lb. steer values to push higher than the $800 per head mark. Heifers of similar weight will likely push toward $700 per head at the same time. Thus, many operations will view this as a profitable price level as it relates to variable cash expenses. There is potential for the value of these animals to move higher than what is stated, but that is more of a timing issue than anything else.”

Week to week on Friday, Feeder Cattle futures closed an average of $2.41 higher from 55¢ higher in spot Mar to $4.70 higher toward the back, recovering about half of the previous week’s losses. Support included a pause to the run higher by grain futures.

Week to week on Friday, Corn futures closed narrowly mixed from fractionally lower to 8¢ higher through the front six contracts.

USDA releases monthly World Agricultural Supply and Demand Estimates on Tuesday, which could add price volatility.

Higher outside markets, tied to increasing COVID-19 vaccinations and hopes of reopening the economy provided overall market support, as did more positive supply fundamentals from the second quarter onward.

“The number of steers and heifers going through our packing plants over the course of the next several years is going to shrink. As it declines, so will our beef production, and prices are going to get higher. We’ll see a transition to a higher trending, more profitable cow-calf operator, feedstock operator and cattle feeder,” said Randy Blach, CattleFax CEO, at last week’s annual International Livestock Forum hosted by Colorado State University and the National Western Stock Show

At the same time, Blach expects consumer beef demand to continue near last year’s extraordinary pace. It was the most in 30 years, according to Blach, based on the Annual U.S. Consumer Beef Demand Index, which was near 180 in 2020, compared to just over 160 the previous year. That was with record beef, pork and poultry production.

“That speaks to the quality of the product that we’re producing in this country,” Blach says. He explained Prime and Choice beef production increased from approximately 11 to 12 billion lbs. in the early 2000s to around 18 billion lbs. last year.

Along the way, the Choice-Select spread maintained its strong pace, while the spread between Choice and the upper two-thirds of Choice grew. The Prime-Choice spread sagged this year due to the dearth of restaurant business.

Fed Cattle Prices Edge Higher

Negotiated cash fed cattle prices last week were mainly $1-$2 higher on a live basis at $114/cwt. in the Southern Plains, mostly $114 in Nebraska and at $112-$114 in the western Corn Belt, according to the AMS. Dressed trade was steady to $2 higher at $178-$180.

Week to week on Friday, Live Cattle futures closed an average of $1.80 higher, erasing the previous week’s decline.

“The futures market is pricing in a strong spring rally for finished cattle with April Live Cattle futures a full $10 higher than current cash prices,” Griffith says. “Essentially, the April futures contract is pricing in a 9% price increase over the next 12 weeks. This may be the information cattle feeders are using to bid for feeder cattle, but there remains the expectation of higher feed costs persisting. The market has a long way to go to reach projections.”

Beef Prices Begin to Stall

Recently resurgent wholesale beef prices showed signs of hitting the seasonal wall last week. Choice boxed beef cutout value was 63¢ higher week to week on Friday at $234.58/cwt. Select was $1.91 lower at $220.79.

“Most purveyors of the beef market likely expect beef prices to soften in February, and possibly into March, as these two months tend to experience soft demand,” Griffith says. “Such a decline would lead into another escalation of prices as grilling season hits. It is difficult to know how consumers will respond, with many restaurants remaining closed or at reduced capacity. If restaurants move toward full capacity at any point, one could expect consumers to be hesitant at first but also eager to dine in such restaurants. Another unknown will be summer sports such as baseball, where a considerable quantity of beef is consumed. Given the information for how the market responded in 2020, beef prices are likely to remain strong in 2021. As demand goes so will prices.”

Friday to Friday Change

Weekly Auction Receipts

Feb. 8 Auction Direct

Video/net

Total
 

225,100

(+31,000)

34,200

(-25,800)

10,900

(-27,400)

270,200

(-22,000)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Feb. 4 Change
  $135.65 –  $0.37

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 8 Change
600-700 lbs. $151.04 –   $2.59
700-800 lbs. $141.14 –   $1.20
800-900 lbs. $133.63 –   $1.50

South Central

Steers-Cash Feb. 8 Change
500-600 lbs. $159.60 +  $0.95
600-700 lbs. $144.67 +  $2.29
700-800 lbs. $135.18 +  $0.65

Southeast

Steers-Cash Feb. 8 Change
400-500 lbs. $160.41 + $4.12
500-600 lbs. $144.71 + $2.65
600-700 lbs. $132.13 –  $1.63

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 5 ($/cwt) Change
Choice $234.58 + $0.63
Select $220.79 –  $1.91
Ch-Se Spread $13.79 + $2.54

 

Futures

Feeder Cattle  Feb. 5 Change
Mar $138.275 + $0.550
Apr $142.200 + $1.450
May $144.775 + $2.100
Aug $152.350 + $2.400
Sep $153.475 + $2.725
Oct  $154.200 + $3.550
Nov $155.100 + $4.700
Jan ’22 $152.525 + $1.825

 

Live Cattle   Feb. 5 Change
Feb $116.725 + $1.675
Apr $123.775 + $1.925
Jun $119.975 + $2.375
Aug $118.500 + $2.000
Oct $121.150 + $1.625
Dec $123.550 + $1.625
Feb ’22 $125.100 + $2.000
Apr $126.000 + $1.750
Jun $121.100 + $1.200

 

Corn  Feb. 5 Change
Mar ’21 $5.484 + $0.014
May $5.474 -0-
Jly $5.362 –  $0.002
Sep $4.782 + $0.080
Oct $4.516 + $0.064
Mar ’22 $4.586 + $0.084

 

Oil CME-WTI Feb. 5 Change
Mar $56.85 + $4.65
Apr $56.70 + $4.62
May $56.40 + $4.52
Jun $56.01 + $4.38
Jly $55.56 + $4.22
Aug $55.07 + $4.07

 

Equities

Equity Indexes Feb. 5 Change
Dow Industrial Average  31148.24 +   1165.62
NASDAQ  13856.30 +     785.60
S&P 500    3886.83 +     172.59
Dollar (DXY)         91.00 +        0.02
February 6th, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 29, 2021

Nationwide, calves and feeder cattle sold $1 to $3/cwt. higher last week, according to the Agricultural Marketing Service.

Week to week on Friday, Feeder Cattle futures closed an average of $4.35 lower ($2.75 to $6.42 lower), not counting recently minted Jan.

“The current uptick in the market may be the beginning of the grass cattle run in prices that will extend into April,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the positive price movement for grass cattle in the spring generally does not gain significant traction until the middle or late February. Thus, if this is the beginning of the spring calf run, then the current price increase may bode well for a strong spring market.”

The CME Feeder Cattle Index was $2.03 higher week to week on Thursday at $136.02.

Griffith adds continued strength in cash calf and feeder cattle prices requires ongoing support from the futures market. “The upside potential for 500-600 lb. steers this spring (TN) is around $155/cwt.,” he says. 

At the same time, though apparently adequate overall, hay supplies are tighter.

“Drought persisted across much of the west in 2020 and has extended into much of the Great Plains at the current time. Several states reveal the impact of the drought on hay production, supplies and the challenges for cattle producers in those regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Fed Cattle at $112-$113

Negotiated cash fed cattle trade last week traded above $112/cwt. for the first time in months. Live prices in the Northern Plains were $3-$4 higher at $113/cwt. and $2-$7 higher in the western Corn Belt at $112. Dressed trade in Nebraska was $5 higher at $178. Elsewhere, established trade had yet to develop through Friday afternoon, according to the Agricultural Marketing Service. On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Week to week on Friday, Live Cattle futures closed an average of $1.36 lower (65¢ to $1.80 lower).

Wholesale beef prices continue to provide solid support.

Choice boxed beef cutout value was $11.13 higher week to week on Friday at $233.95/cwt. Select was $9.36 higher at $222.70. That’s $21.03 higher for Choice over the last two weeks and $19.62 higher for Select.

“Winter is known for strong roast demand, but it is evident that consumers are still looking for steaks in the current market,” Griffith says. “This seems to be a trend that is becoming more pronounced year after year. In other words, consumers may be shifting some of their seasonal beef demand habits. With the composite Choice boxed beef price already over $230, there is a chance that the weekly apex for Choice boxed beef this spring could move as high as $250.”

Griffith notes prices increased at least 16% since the beginning of the year for the short loin, strip loin, and top inside round.

Beef Cow Herd Declines Slightly

The nation’s beef cow herd began this year with 31.16 million head, according to the semi-annul Cattle report from USDA on Friday. That’s 181,000 head fewer or 0.58% less than the previous year.

The number of beef heifers retained for replacement of 5.81 million head was 3,200 head more than the previous year, just 0.06% more.

As of Jan. 1, the calculated number of calves outside feedlots was 25.66 million head, which were 62,000 head fewer (-0.24%) than a year earlier.

Milk cows Jan. 1 of 9.44 million head were 97,400 (+1.04%) more than the previous year.

The inventory of all cattle and calves was estimated at 93.59 million head, down 198,000 (-0.21%) from a year earlier.

Friday to Friday Change

Weekly Auction Receipts

Last available

Feb. 1 Auction Direct

Video/net

Total
 

194,100

(-112.200)

60,000

(-13,300)

38,300

(+31,600)

292,400

(-93,900)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 28 Change
  $136.02 + $2.03

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 1 Change
600-700 lbs. $153.63 +  $4.20
700-800 lbs. $142.34 +  $1.50
800-900 lbs. $135.13 +  $1.30

South Central

Steers-Cash Feb. 1 Change
500-600 lbs. $158.65 +  $2.42
600-700 lbs. $142.38 +  $2.42
700-800 lbs. $134.53 +  $1.84

Southeast

Steers-Cash Feb. 1 Change
400-500 lbs. $156.29 + $2.44
500-600 lbs. $142.06 + $2.68
600-700 lbs. $133.76 + $4.89

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 29 ($/cwt) Change
Choice $233.95 + $11.13
Select $222.70 + $9.36
Ch-Se Spread $11.25 + $1.77

 

Futures

Feeder Cattle  Jan. 29 Change
Mar $137.725 –  $6.425
Apr $140.750 –  $5.375
May $142.375 –  $4.650
Aug $149.950 –  $2.750
Sep $150.750 –  $3.325
Oct  $150.650 –  $3.900
Nov $150.400 –  $4.000
Jan ’22 $150.400 n/a

 

Live Cattle   Jan.29 Change
Feb $115.050 –  $1.675
Apr $121.850 –  $0.675
Jun $117.600 –  $1.200
Aug $116.500 –  $1.775
Oct $119.525 –  $1.800
Dec $121.925 –  $1.550
Feb ’22 $123.100 –  $1.550
Apr $124.250 –  $1.350
Jun $119.900 –  $0.650

 

Corn  Jan. 29 Change
Mar ’21 $5.470 + $0.466
May $5.474 + $0.444
Jly $5.364 + $0.378
Sep $4.702 + $0.188
Oct $4.452 + $0.150
Mar ’22 $4.502 + $0.128

 

Oil CME-WTI Jan. 29 Change
Mar $52.20 –  $0.07
Apr $52.08 –  $0.11
May $51.88 –  $0.16
Jun $51.63 –  $0.19
Jly $51.34 –  $0.20
Aug $51.00 –  $0.24

 

Equities

Equity Indexes Jan. 29 Change
Dow Industrial Average  29982.62 –    1014.36
NASDAQ  13070.70 –      472.36
S&P 500   3714.24 –       127.23
Dollar (DXY)       90.53 +          0.29
January 31st, 2021|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 22, 2021

Weakening grain futures prices helped fuel Feeder Cattle futures, sparking higher cash calf and feeder cattle prices toward the end of last week. Prices were significantly higher in some cases at the weekly auctions monitored by Cattle Current.

Overall, steers and heifers sold from $1 lower to $3 higher, according to the Agricultural Marketing Service.

Week to week on Friday, Feeder Cattle futures closed an average of $5.47 higher ($3.92 to $8.32 higher). Corn futures closed an average of 31¢ lower through the front six contracts and Soybean futures closed an average of 99¢ lower through the front six contracts.

Although welcome, the significant decline in grain futures likely represents a temporary reprieve, according to Aaron Smith, Extension crop marketing specialist at the University of Tennessee (UT).

“The underlying supply and demand numbers supported the August 2020-January 2021 rally (corn, soybeans and wheat), but you can only have so many weeks with double-digit gains before the market declines and seeks  to establish a new trading range,” Smith explains, in his weekly Crop Comments. “Next week we are likely to see some volatility as markets seek a path forward. Nearby soybean futures should find support near $12.50, corn near $4.50, and wheat near $6.00.”

In the latest monthly Livestock, Dairy and Poultry Outlook (LDPO), analysts with USDA’s Economic Research Service (ERS) say the average feeder steer price last year was about 5% less than the previous year at $135.45/cwt. That’s basis a 750-800 lb. steer selling at Oklahoma National Stockyards.

“Prices in the first two weeks of January 2021 averaged $134.81, about 7% below the monthly average for January 2020,” ERS analysts say. “To the extent that prices at the beginning of 2021 were higher than expected, the first-quarter 2021 forecast was raised $1 to $134/cwt. However, higher expected feed costs lowered expectations for prices the rest of the year, and as a result the annual price forecast for feeder steers was lowered $1 to $137.”

Specifically, the average feeder steer price is projected at $134/cwt. in the first and second quarters, $139 in the third quarter and $140 in the fourth quarter for an annual average of $136.75.

“Demand for lightweight cattle will begin to pick up in the coming weeks as several buyers will be trying to buy some cattle before the grass cattle run reaches warp speed. This expected increase in demand will slowly begin to support calf prices, which should be beneficial to producers who are in a situation where they have to sell calves in the near term,” says Andrew P. Griffith, UT agricultural economist. “Feeder Cattle futures are also providing some price risk management opportunities for buyers. For example, the August Feeder Cattle contract price has shown a $5/cwt. increase this week and has exceeded the contract high…The stronger futures market may or may not hold, but it should support cash prices of calves and feeder cattle in the near term.”

Feedlot Placements More than Expected

Markets could view Friday’s Cattle on Feed report (feedlots with 1,000 head or more capacity) as a bit bearish with December placements 0.77% more than the previous year. Estimates ahead of the report expected a decrease of about 3%. The 1.84 million head placed were the second most for the month since the data series began in 1996, according to the National Agricultural Statistics Service.

Marketings in December of 1.85 million head were 1% more than the prior year, slightly more than expectations ahead of the report.

The on-feed inventory Jan. 1 of 11.96 million head was slightly more than the previous year, whereas average of expectations was for a decline of about 0.5%.

Fed Cattle Prices Unevenly Steady

Negotiated cash fed cattle sales last week, on a live basis, were mostly steady to $1 on either side of steady at $110-$111/cwt. in the Southern Plains, $109-$110 in the Northern Plains and $108-$110 in the western Corn Belt. Dressed trade was steady to $3 lower at $170-$173.

Week to week on Friday, Live Cattle futures closed an average of $2.51 higher though the front five contracts (50¢ to $4.32 higher) and then 10¢ to 82¢ lower at the back.

“February Live Cattle futures are trading over $116, which means the $7 gap between today’s cash price and the futures price has to be closed at some point. It can either happen by cash prices increasing, futures prices decreasing, or a mixture of both,” Griffith says. “The April Live Cattle contract is over $122 which provides a lot of optimism for cattle feeders moving forward. One would have to imagine cattle feeders are laying off some risk at this level.”

USDA projects the average five-area direct fed steer price at $113 in the first and second quarters, at $115 in the third quarter and at $120 in the fourth quarter.

Wholesale Beef Prices Continue Higher

Choice boxed beef cutout value was $9.90 higher week to week on Friday at $222.82/cwt. Select was $10.26 higher at $213.34. That’s $16.02 higher for Choice over the last two weeks and $16.62 higher for Select.

“The driver behind higher prices does not appear to be supply driven because beef production the first couple weeks of the year was greater than the same weeks one year ago,” Griffith says. “The thought then goes to demand driving the price. Looking at monthly beef trade data, beef and veal exports in November were 13.2% higher than the previous year and totaled 277 million pounds. Monthly data is not available for December, but the weekly beef muscle cut export data shows an increase of 23.3% for December; this has likely carried over to 2021. It appears the appetite for beef is strong and that same strength is likely found domestically. Additionally, there have been news reports that China may become a bigger player in U.S. markets now that the new presidential administration has taken office.”

As reported in Cattle Current earlier in the week, U.S. beef exports to China were record high from July through November of last year, suggesting progress and promise, but still representing less than 1% of the beef imported by that nation, according to USDA’s Economic Research Service.

Projected domestic beef availability also appears to be price supportive.

Even though total domestic red meat and poultry production if forecast higher this year, ERS analysts expect per capita meat disappearance to decline about 1%, due to increased exports and reduced beef imports.

Beef production for this year was projected lower than the previous month at 27.2 billion lbs. but still would be more than in 2020.

Friday to Friday Change

Weekly Auction Receipts

Jan. 25 Auction Direct

Video/net

Total
 

306,300

(-7,100)

73,300

(+9,500)

6,700

(-150,600)

386,300

(-148,200)

 

CME Feeder Index

Thursday through Thursday…

CME Feeder Index* Jan. 21 Change
  $133.99 –   0.46

*Wednesday-to Wednesday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 25 Change
600-700 lbs. $149.43 +  $0.72
700-800 lbs. $140.84 +  $3.63
800-900 lbs. $133.83 +  $3.09

South Central

Steers-Cash Jan. 25 Change
500-600 lbs. $156.23 –  $0.73
600-700 lbs. $139.96 –  $0.26
700-800 lbs. $132.69 +  $0.80

Southeast

Steers-Cash Jan.25 Change
400-500 lbs. $153.85 –  $1.03
500-600 lbs. $139.38 –  $0.09
600-700 lbs. $128.87 –  $0.87

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 22 ($/cwt) Change
Choice $222.82 + $9.90
Select $213.34 + $10.26
Ch-Se Spread $9.48 –  $0.36

 

Futures

Feeder Cattle  Jan. 22 Change
Jan  $137.250 + $2.675
Mar $144.150 + $8.325
Apr $146.125 + $7.825
May $147.025 + $6.775
Aug $152.700 + $5.200
Sep $154.075 + $4.725
Oct  $154.550 + $4.300
Nov $154.400 + $3.925

 

Live Cattle   Jan.22 Change
Feb $116.725 + $3.950
Apr $112.525 + $4.325
Jun $118.800 + $2.525
Aug $118.275 + $1.250
Oct $121.325 + $0.500
Dec $123.475 -0-
Feb ’22 $124.650 –  $0.100
Apr $125.600 –  $0.150
Jun $120.550 –  $0.825

 

Corn  Jan. 22 Change
Mar ’21 $5.004 –  $0.310
May $5.030 –  $0.316
Jly $4.986 –  $0.334
Sep $4.514 –  $0.340
Oct $4.302 –  $0.298
Mar ’22 $4.374 –  $0.280

 

Oil CME-WTI Jan. 22 Change
Mar $52.27 –  $0.15
Apr $52.19 –  $0.17
May $52.04 –  $0.19
Jun $51.82 –  $0.22
Jly $51.54 –  $0.28
Aug $51.24 –  $0.33

 

Equities

Equity Indexes Jan. 22 Change
Dow Industrial Average  30996.98 +    187.72
NASDAQ  13543.06 +    544.56
S&P 500   3841.47 +      73.22
Dollar (DXY)       90.21 –         0.56
January 24th, 2021|Weekly Market Highlights|

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.

Steers and heifers sold $2-$4/cwt. lower in the North Central and South Central regions last week, according to the Agricultural Marketing Service (AMS), in it’s weekly summary on Tuesday. In the Southeast, though, calves suitable for grazing traded $2-$4 higher.

“Demand was reported as good to even very good in some auctions, but at lower price levels than the previous week in the Plains,” say AMS analysts. “The most talked about factor was the increase of grain prices and how it will affect the feeder and slaughter cattle markets moving forward.” They note feeder cattle auction prices are $10-$15 less than a year earlier.

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

Jan. 18 Auction Direct

Video/net

Total
 

313,400

(-35,400)

63,800

(+23,500)

157,300

(+70,000)

534,500

(+57,100)

 

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

North Central

Steers-Cash Jan. 18 Change
600-700 lbs. $148.71 –   $2.83
700-800 lbs. $137.21 –   $3.79
800-900 lbs. $130.74 –   $4.04

South Central

Steers-Cash Jan. 18 Change
500-600 lbs. $156.96 –  $0.36
600-700 lbs. $140.22 –  $2.09
700-800 lbs. $131.89 –  $2.66

Southeast

Steers-Cash Jan. 18 Change
400-500 lbs. $154.88 + $2.93
500-600 lbs. $139.47 –  $3.19
600-700 lbs. $129.74 –  $2.17

(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