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 May 22, 2020

Cash fed cattle prices underpinned more optimism last week, with buyers mostly paying more for calves and feeder cattle amid increased auction volume.

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

Feeder Cattle futures closed an average of $2.23 lower week to week on Friday.

“There are two aspects of the market worth noting and they are that prices for most classes of cattle are holding their ground or showing slight improvements and the number of cattle being marketed is increasing,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Even though the economy is not completely business as usual, it does seem the workforce and consumers are trying to achieve some sort of normalcy… Many of the animals that are hitting the feeder calf and feeder cattle market at this time were probably delayed to some degree as producers attempted to manage through the coronavirus pandemic. At the same time, there are producers who are looking to purchase cattle and those producers are likely behind on making purchases because cattle did not come to market from the middle of March through early May. Thus, these producers may have to purchase a little heavier animal than typical to meet their needs.

Feedlot Placements Down 22%

Markets will likely view Friday’s monthly USDA Cattle on Feed report as neutral, with numbers about mirroring pre-report estimates.

For feedlots with 1,000 head or more capacity, April placements of 1.43 million head were 22.26% less than the prior year. April marketings of 1.46 million head were 24.32% less than a year earlier. On-feed inventory May 1 was 5.14% less at 11.20 million head.

In the latest monthly Livestock, Dairy and Poultry Outlook (LDPO), analysts with USDA’s Economic Research Service (ERS) estimated there were 20.54 million head of cattle outside feedlots Apr. 1. That was 657,000 head more (+3.30%) than the same time a year earlier.

As the backlog of market-ready fed cattle continues to grow and feedlot margins are squeezed, ERS expects feeder cattle prices to remain under pressure.

“Based on recent price data, the second-quarter 2020 feeder steer price was lowered by $2 to $121/cwt. The third-quarter 2020 price forecast was lowered $5 to $123 and the fourth-quarter 2020 price was lowered $17 to $118,” say ERS analysts. “As a result, this month’s annual price forecast for 2020 was $124.50/cwt., close to last month’s forecast. The price forecast for first-quarter 2021 is expected to remain relatively low at $125. Feeder steer prices are expected to improve in the second half of 2021 on increased demand. The 2021 annual feeder steer price is forecast at $131.50, more than 5% higher than 2020.”

Fed Cattle Prices Bounce Higher

Negotiated cash fed cattle traded ended up mainly $5-$10 higher on a live basis last week at mostly $120/cwt. in the Southern Plains and at $119-$120 in Nebraska. Dressed trade was mostly $10 higher at mainly $190.

Other than 70¢ and 87¢ higher on either end of the board, Live Cattle futures closed an average of 41¢ lower week to week on Friday.

“This is the first week since the beginning of January when finished cattle prices exceeded year-ago prices from the same week. Additionally, this is only the third week this year when finished cattle prices have been higher than year-ago prices,” Griffith says. “There is a good possibility that finished cattle prices will see year- over-year gains, given that current prices are improving and year-ago prices were declining. The environment today is much different than a year ago, which provides optimism for year-over-year price gains, but that does not mean finished cattle prices will continue to surge higher. Increasing fed cattle slaughter will do the most to improve prices, but the rest will be left up to a consumer base that is struggling with cash flow.”

USDA estimated total cattle slaughter for the week at 555,000 head, which would be 56,000 head more (+11.2%) than the previous week, but 92,000 head fewer (-14.2%) than the same week a year earlier. Year to date, cattle slaughter of 12.11 million head is 893,000 head fewer (-6.9%) than the same period least year.

“The buildup in fed cattle supplies that are market ready is expected to have a substantial and lasting effect on fed cattle prices,” say ERS analysts. “Prices will remain low as the supply of market-ready cattle remains above the sector’s ability to process them, and the supply issue is expected to linger through 2021.”

Consequently, ERS lowered this year’s average price forecast for fed steers (five-area direct) to $104.08/cwt.: $118.32 in the first quarter; $99 in the second and third quarters; $100 in the fourth quarter. The projected annual average price for next year is $109.

Keep in mind the forecast runs counter to current cash prices, which appear to be supported by packers’ willingness to give back some of their margins.

Wholesale Beef Value Decline Continues

As packing capacity recovers and beef production increases, wholesale beef values continue heading south.

Choice boxed beef cutout value was $37.58 lower week to week on Friday at $396.74/cwt. Select was $44.88 lower at $374.18.

“The increase in slaughter and the increase in beef production is slowly lowering boxed beef prices at a time when consumers are preparing for the unofficial start of summer,” Griffith notes. “Generally, this is a weekend when consumers head to the grocery store and spend a little extra at the meat counter to get good quality middle meats to throw on the grill. This typical action will likely be muted this year as unemployment rates have spiked and retail beef prices are extremely high. In some instances, ground beef may even be too expensive for many consumers to consider as the main course when celebrating Memorial Day. It is difficult to imagine consumers trading a steak for a pork chop or a chicken breast but that may be the case if consumers are already running low on cash.”

Friday to Friday Change

 

Weekly Auction Receipts

 

May 22 Auction Direct

Video/net

Total
 

204,800

(+33,800)

51,200

(+24,000)

1,800

(-32,800)

257,800

(-23,000)

 

CME Feeder Index

CME Feeder Index* May 21 Change
  $126.24 +  $1.44

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash May 22 Change
600-700 lbs. $150.55 +   $0.10
700-800 lbs. $139.24 –    $0.44
800-900 lbs. $130.99 +   $4.23

 

South Central

Steers-Cash May 22 Change
500-600 lbs. $154.23 + $0.34
600-700 lbs. $141.13 + $0.28
700-800 lbs. $131.59 + $1.71

 

Southeast

Steers-Cash May 22 Change
400-500 lbs. $150.63 + $2.67
500-600 lbs. $140.39 + $0.99
600-700 lbs. $130.86 + $2.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) May 22 ($/cwt) Change
Choice $396.74 –  $37.58
Select $374.18 –  $44.88
Ch-Se Spread $22.56 +   $7.30

 

Futures

Feeder Cattle  May 22 Change
Aug $128.800 –  $2.275
Sep $130.150 –  $2.600
Oct $131.250 –  $2.700
Nov $132.075 –  $2.500
Jan ’21 $131.175 –  $2.050
Mar $130.925 –  $1.750
Apr $131.350 –  $1.725
Aug $131.775 n/a

 

Live Cattle   May 22 Change
Jun $97.700 + $0.700
Aug $97.325 –  $0.500
Oct $99.400 –  $0.950
Dec $102.750 –  $0.425
Feb ’21 $106.700 –  $0.125
Apr $109.575 –  $0.275
Jun $102.575 –  $0.425
Aug $101.825 –  $0.200
Oct $104.800 + $0.875

 

Corn  May 22 Change
Jly  $3.180 – $0.012
Sep $3.226 – $0.004
Dec $3.326 +$0.006
Mar ’21 $3.452 +$0.006
May $3.526 +$0.006
Jly $3.580 +$0.006

 

Oil CME-WTI May 22 Change
Jly $33.25 + $3.73
Aug $33.65 + $3.53
Sep $34.14 + $3.45
Oct $34.49 + $3.38
Nov $35.18 + $3.28
Dec $35.18 + $3.17

 

Equities

Equity Indexes May 22 Change
Dow Industrial Average  24465.14 +  779.72
NASDAQ    9324.59 +  310.03
S&P 500    2955.45 +     91.75
Dollar (DXY)       99.80 –        0.56
May 24th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending May 15, 2020

Cash cattle prices mainly increased last week, in the face of volatile futures trade, clouded by how soon and how much packing capacity will return, the growing backlog of market-ready fed cattle, as well as demand uncertainty tied to the reopening of the U.S. economy and consumer economic wherewithal.

Nationwide, calves and feeder cattle traded $1-$5/cwt. higher, according to the Agricultural Marketing Service (AMS).

“The best demand, by far, remains on light calves suitable for backgrounding,” say AMS analysts. “Seller interest improved somewhat, while some ranchers continue to resist the current market.” Even so, they point out that auction volume continued heavy as cattle came to town from winter wheat and ryegrass pastures in the Southern Plains.

Feeder Cattle futures closed an average of $3.89 lower week to week on Friday, giving back about half of what was gained the previous week.

“It is extremely risky, from a market analyst standpoint, to make a statement about the direction of cattle prices, but the past couple of weeks give the appearance that the market may be finding some stability,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The key to a stronger feeder cattle market is feedlots being able to move the current cattle out and opening up pen space. This can only be done if slaughter rates begin to accelerate. The thought is that cattle prices will recover as slaughter capacity recovers. However, there will still be seasonal tendencies that influence the market. There will be some changes to seasonal tendencies as fewer cattle have been placed in feedlots the past couple of months, but those seasonal changes may not be as drastic as some people may think. The cattle that are still in the country are going to be heavier placements, which means fewer days on feed.”

Fed Cattle Prices Continue Higher

Packing capacity continues to recover from COVID-19 slowdowns, albeit slowly.

Estimated slaughter under federal inspection last week was 499,000 head, which was 47,000 head more than the previous week and 74,000 head more than two weeks earlier, but still 163,000 head fewer than same week last year, according to the Agricultural Marketing Service (AMS).

That helped boost fed cattle prices, although it remains difficult to get a firm handle on value as prices continue across a wide range and as packers appear to be paying more than current fundamentals dictate.

The five-area direct weighted average steer price through Thursday was $11.36 higher than the previous week at $111.40/cwt. The average price in the beef was $19.90 higher at $179.30.

Regionally, negotiated cash fed cattle prices were $10-$15 higher on a live basis at $115/cwt. in Kansas, $119-$120 in Nebraska and $115 in the western Corn Belt. AMS reported live prices at the Texas Panhandle at mostly $110, while the Texas Cattle Feeders Association reported its members trading steers at a weighted average price of $112.53 and heifers at $113.29. Dressed prices in the North were $10-$30 higher at $180.

“It will likely take many weeks for slaughter rates to catch up with the growing backlog of fed cattle and get the industry current once again,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Meantime, all sectors of the industry are responding to the need to slow cattle down and hold them longer in a variety of production settings before proceeding to finish in feedlots. Fed cattle weights are increasing and pushing carcass weights higher counter-seasonally.”

The average five-area direct fed steer price (FOB) in April was $10.46/cwt. less than the previous month at $102.02, according to the most recent monthly report from USDA. In the beef (delivered), the average steer price of $159.27 was $19.30 less.

Other than $2.35 higher in spot Jun, Live Cattle futures closed an average of $3.55 lower week to week on Friday, giving back a little more than half of what was gained the previous week.

“It is understandable for there to be a gap in cash prices and the futures market since it is not June, but the basis is just too large right now,” Griffith says. “There are still a lot of skeptics that think finished cattle prices will continue to falter, but the market is demanding meat protein. There is no way to guess what will happen to finished cattle prices, but feedlots will continue to market as many cattle as possible with the strong basis and backed up cattle.”

Wholesale Beef Values Appear to Top

Wholesale beef values declined sharply Wednesday–the first day-to-day decline since Apr. 8–likely signaling the Covid-skewed top was established.

Choice boxed beef cutout value was $26.56 lower week to week on Friday at $434.32/cwt. Select was $29.93 lower at $419.06.

“The main story from a meat perspective is the daily and weekly slaughter levels. Cattle slaughter the first quarter of the year exceeded 621,000 head every week except the first week of the year. There was even a week when cattle slaughter nearly reached 685,000 head just prior to April,” Griffith explains. “Slaughter levels then declined rapidly as facilities closed or reduced harvest levels in the middle of April. Slaughter levels on a weekly basis fell to about 425,000 head the last week of April and starting into May.”

USDA projects beef production at 25.76 billion lbs. this year, according to the latest monthly World Agricultural Supply and Demand Estimates (WASDE). That’s 1.68 billion lbs. less (-6.12%) than the April forecast and would be 1.39 billion lbs. less (-5.12%) than last year.

Friday to Friday Change

Weekly Auction Receipts

 

May 15 Auction Direct

Video/net

Total
 

171,000

(-11,100)

75,200

(-8,500)

35,400

(+6,100)

281,600

(-13,500)

 

CME Feeder Index

CME Feeder Index* May 14 Change
  $124.80 +  $3.66

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash May 15 Change
600-700 lbs. $150.45 +   $5.24
700-800 lbs. $139.68 +   $4.24
800-900 lbs. $126.76 +   $4.86

 

South Central

Steers-Cash May 15 Change
500-600 lbs. $153.89 + $3.27
600-700 lbs. $140.85 + $3.03
700-800 lbs. $129.88 + $3.16

 

Southeast

Steers-Cash May 15 Change
400-500 lbs. $147.96 + $0.11
500-600 lbs. $139.40 + $1.80
600-700 lbs. $128.78 + $1.59

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) May 15 ($/cwt) Change
Choice $434.32 –  $26.56
Select $419.06 –  $29.93
Ch-Se Spread $15.26 +   $3.37

 

Futures

Feeder Cattle  May 15 Change
May $124.725 –  $3.175
Aug $131.075 –  $5.875
Sep $132.750 –  $5.400
Oct $133.950 –  $5.075
Nov $134.575 –  $5.050
Jan ’21 $133.225 –  $4.650
Mar $132.675 –  $3.025
Apr $133.075 –  $3.950

 

Live Cattle   May 15 Change
Jun $97.000 + $2.350
Aug $97.825 –  $2.375
Oct $100.350 –  $3.925
Dec $103.175 –  $4.525
Feb ’21 $106.825 –  $4.825
Apr $109.850 –  $4.375
Jun $103.000 –  $3.200
Aug $102.025 –  $2.575
Oct $103.925 –  $2.575

 

Corn  May 15 Change
Jly  $3.192 -0-
Sep $3.230 – $0.016
Dec $3.320 – $0.036
Mar ’21 $3.446 – $0.044
May $3.520 – $0.044
Jly 3.574 – $0.046

 

Oil CME-WTI May 15 Change
Jun $29.43 + $4.69
Jly $29.52 + $3.35
Aug $30.12 + $2.07
Sep $30.69 + $1.18
Oct $31.11 + $0.63
Nov $31.56 + $0.29

 

Equities

Equity Indexes May 15 Change
Dow Industrial Average  23685.42 –   645.90
NASDAQ    9014.56 –   106.76
S&P 500    2863.70 –     66.10
Dollar (DXY)       100.36 +        1.26
May 18th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending May 8, 2020

Demand increased for calves and feeder cattle–especially after mid-week–helped along by stronger cash fed cattle prices and increasing confidence that the previous week’s Executive Order–mandating meat and processing facilities remain open–will help normalize the supply chain, eventually.

Steers and heifers sold steady to $5/cwt. higher, according to the Agricultural Marketing Service (AMS).

Feeder Cattle futures closed an average of $8.83 higher week to week on Friday.

“From a fundamental standpoint, the futures market started the year overvaluing feeder cattle. However, coronavirus resulted in a huge selloff, which then sent the market into undervaluing feeder cattle which has persisted for nearly two months,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “It would seem the market is adjusting to the current environment and trying to bring feeder cattle values back in line with a more fundamental expectation for the year. The futures market likely still has feeder cattle undervalued to a slight degree, looking into the summer and fall contracts, but the market is much more in line with expectations.”

Griffith adds that both cash and futures prices will likely remain volatile as the market seeks equilibrium.

Cash Fed Cattle Prices Gain

Negotiated cash fed cattle trade ended the week on a decidedly higher. Live sales in the Southern Plains were at $115/cwt., which was $5 more than earlier in the week and $10-$20 higher than the previous week. Live sales in Nebraska were $19-$20 higher than the previous week at $114-$115. Live sales in the western Corn Belt were mainly $3-$10 higher than the previous week at mostly $103; dressed sales there were $20-$30 higher at mostly $180.

“This strength is most likely due to the slight increase in estimated cattle slaughter and continued strong demand for beef,” Griffith says.

According to AMS, estimated cattle slaughter under federal inspection for the week was reported at 452,000 head, still well below where it needs to be, but 27,000 head more than the previous week.

Live Cattle futures closed an average of $6.02 higher week to week on Friday ($3.50 higher at the back to $7.65 higher toward the front.

Although day-to-day gains moderated as the week wore on, the bottleneck in beef packing and processing continued to boost wholesale beef values.

Choice boxed beef cutout value was $83.43 higher week to week on Friday at $460.88/cwt. Select was $91.86 higher at $448.99.

Cattle slaughter and beef production continue vastly lower year over year, while the backlog of fed cattle continues to build.

Estimated cattle slaughter for the week ending May 2 was 425,000 head, which was 38% less year over year, according to Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. For the past four weeks (through May 2), he says total cattle slaughter averaged 26.4% less than the same weeks last year–down 689,000 head, or a little more than a week’s worth of cattle slaughter.

Similarly, Peel explains beef production was down 35% the previous week, compared to a year earlier; an average of 25% less for the past four weeks. Relative to the first 14 weeks of the year, before current COVID-19 production declines began, he says the combined 520 million lbs. of reduced beef production over the last four weeks equates to losing a week’s worth of production.

“Given when packing plant workers began to be impacted and the additional attention now focused on protecting worker health, it is likely that we are currently at or very near the worst point of packing plant disruptions,” Peel says. “However, it is unclear how fast plants will resume production levels in the coming weeks. It is likely that the effective capacity will be reduced permanently or certainly for the foreseeable future because of the safety changes needed at packing plants. The impacts on cattle markets will linger for many weeks before backlogs are cleaned up and markets are current again.”

For consumers, Peel emphasizes there is no shortage of beef in the country. Any lack of availability encountered will be temporary.

Even so, there will likely continue to be plenty of angst from the ranch gate to the retail meat case.

“Soon, U.S. consumers will begin to see in their local meat case the effects of the beef and pork plant shut downs in April, with potentially 30% less meat on shelves and prices up to 20% above last year,” according to a new report from CoBank’s Knowledge Exchange Division: Closed Meat Cases Today Mean Empty Meat Cases this Summer. “For cattle and hog producers, the bottlenecks created by the plant slowdowns and shut downs have meant they will lose billions of dollars this year and be forced to euthanize millions of pigs. In spite of President Trump’s executive order to re-open the plants, per capita COVID-19 cases around U.S. meat plants have continued to climb, raising the risk of further plant capacity disruptions.”

U.S. Beef Exports and Imports Continue to Add Value

As scarcer beef supplies spawn more retail and food service outlets to limit customer purchases, some consumers wonder why the U.S. continues to export beef. Similarly, as cattle prices sag and run opposite of wholesale beef values, some producers question why the U.S. continues to import beef.

“Closing off or limiting beef exports does not necessarily mean greater amounts of beef in U.S. retail grocery stores, nor does limiting imports mean greater cattle prices,” says Brenda Boetel, livestock economist at the University of Wisconsin-River Falls. “The reason is because beef exported is not the same as beef imported. Even with beef production down, the importance of keeping export markets (and import markets) open is vital to the long-term health of the cattle industry.”

More specifically, in the latest issue of In the Cattle Markets, Boetel explains the mix of U.S. beef exports add value to domestic cattle prices as international customers place a higher value on some beef products than U.S. consumers.

Likewise, importing beef–mostly lean trim–helps bolster U.S. ground beef demand and keep it more price competitive than using higher value parts of the domestic carcasses.

U.S. beef exports were record high for the first quarter, according to the latest data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

U.S. beef exports in March totaled 115,308 metric tons (mt), up 7% from a year earlier. Value was 4% more at $702.2 million. Japan, South Korea, Mexico, Canada and Taiwan drove export growth for the month.

First-quarter beef exports climbed 9% from a year earlier to 334,703 mt; valued at $2.06 billion, which was 8% higher.

Beef export value per head of fed slaughter was $308.21 in March, down 8% from the very high March 2019 average. For the first quarter, per-head export value increased 2% to $317.06.

Friday to Friday Change

Weekly Auction Receipts

 

May 8 Auction Direct

Video/net

Total
 

182,100

(-37,100)

83,700

(+8,200)

29,300

(+28,000)

295,100

(-900)

 

CME Feeder Index

CME Feeder Index* May 7 Change
  $121.14 +  $1.75

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash May 8 Change
600-700 lbs. $145.21 –    $1.71
700-800 lbs. $135.44 +   $1.35
800-900 lbs. $121.90 –    $0.63

 

South Central

Steers-Cash May 8 Change
500-600 lbs. $150.62 + $1.27
600-700 lbs. $137.82 + $1.80
700-800 lbs. $126.72 + $4.55

 

Southeast

Steers-Cash May 8 Change
400-500 lbs. $147.85 + $2.60
500-600 lbs. $137.60 + $0.19
600-700 lbs. $127.19 + $1.53

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) May 8 ($/cwt) Change
Choice $460.88 + $83.43
Select $448.99 + $91.86
Ch-Se Spread $11.89 –  $8.24

 

Futures

Feeder Cattle  May 8 Change
May $127.900 + $10.075
Aug $136.950 + $9.300
Sep $138.150 + $9.100
Oct $139.025 + $9.125
Nov $139.625 + $9.150
Jan ’21 $137.875 + $8.800
Mar $135.700 + $7.575
Apr $137.025 + $7.550

 

Live Cattle   May 8 Change
Jun $94.650 + $7.400
Aug $100.200 + $7.650
Oct $104.275 + $7.475
Dec $107.700 + $6.725
Feb ’21 $111.650 + $6.275
Apr $114.225 + $6.700
Jun $106.200 + $4.950
Aug $104.600 + $3.550
Oct $106.500 + $3.500

 

Corn  May 8 Change
May $3.190 +$0.076
Jul $3.192 +$0.008
Sep $3.246 – $0.008
Dec $3.356 – $0.010
Mar ’21 $3.490 – $0.012
May $3.564 – $0.018

 

Oil CME-WTI May 8 Change
Jun $24.74 + $4.96
Jly $26.17 + $3.88
Aug $28.05 + $3.85
Sep $29.51 + $3.82
Oct $30.48 + $3.69
Nov $31.27 + $3.53

 

Equities

Equity Indexes May 8 Change
Dow Industrial Average  24331.32 +   607.63
NASDAQ   9121.32 +   516.37
S&P 500    2929.80 +     99.09
Dollar (DXY)         99.10 +        0.31
May 9th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending May 1, 2020

At least shades of normalcy returned to calf and feeder cattle markets last week, with auction receipts of 219,200 head being more year over year for the first time in 10 weeks, according to the Agricultural Marketing Service (AMS).

Renewed volume, relative to the continued packing bottleneck and slowed feedlot turnover, went a long ways in explaining some weaker auction prices week to week, despite gains in Cattle futures.

Nationwide, steers and heifers sold steady to $4 /cwt. lower, according to AMS. The exception was $2-$4 higher for heifers weighing 700-900 lbs. in the North Central and South Central regions.

Not counting recently minted away-Apr, Feeder Cattle futures closed an average of 68¢ higher week to week on Friday (10¢ to $1.25 higher), except for $1.62 lower in Mar.

Given ongoing market uncertainty, Andrew P. Griffith, agricultural economist at the University of Tennessee says he continues to receive questions from producers about whether to sell calves now or wait.

“There are very few, if any, acceptable outcomes, given the current environment,” Griffith says, in his weekly market comments. “Determining the true value of the cattle is nearly impossible in this environment, given the risk that the buyer is taking. That is not to say the current marketing environment is any riskier than it was in January, but buyers’ perceptions of risk have changed, which means they are not going to be as willing to bid up for cattle. Not knowing when anything will improve may mean that many producers just have to take their losses today and hope the next round is more profitable.”

It’s also worth noting that cattle are starting to move to market from wheat pasture.

Fed Prices Battle for Steady

Negotiated cash fed cattle prices ended the week across a wide range but generally steady with the previous week with live prices at $95-$100 in the Texas Panhandle, $95-$105 in Kansas and Nebraska and at $93-$100 in the western Corn Belt. Dressed sales were at $150-$160.

Through Thursday, the negotiated five-area daily weighted average direct live steer price was $1.03 less than the previous week at $95.92/cwt. It was 23¢more in the beef at $154.50.

Live Cattle futures closed an average of $2.79 higher week to week on Friday ($1.55 higher at the back to $4.62 higher in spot Jun), not counting newly minted away Oct.

“Cash cattle continue to trade with a strong basis compared to the June Live Cattle futures price, which is trading near $87-$88, which means hedged cattle can still make some money for the feedlot operator,” Griffith says. “The rather large basis points to a disconnect between the cash and futures market at this time, but that disconnect is largely the risk of the unknown. The one known fact is that cattle feeders still have cattle that need to be marketed and they can only slow growth so much.”

Support for the fed cattle market last week included the Executive Order signed by President Trump mandating that meat packing and processing facilities remain open. At the time, estimated daily hog and cattle slaughter were both down about 40% compared to the same time last year, according to Jayson Lusk, noted Purdue University food and agricultural economist, in his blog.

“Plant closures and slow-downs from COVID-19 have reached such levels that it will be impossible for consumers not to notice effects on meat prices or availability in the coming weeks,” Lusk says.

“While there are currently no widespread shortages of beef, we are seeing supply chain disruptions because of plant closures and reductions in the processing speed at many, if not most, beef processing plants in the United States. We thank President Trump for his recognition of the problem and the action he has taken to begin correcting it,” says Colin Woodall chief executive officer of the National Cattlemen’s Beef Association.

“The executive order will help ensure a steady, reliable supply of high-quality U.S. protein-not only for customers in the United States, but across the globe,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF). “The U.S. meat industry is already taking extraordinary steps to ensure worker safety, including COVID-19 testing, temperature checks, use of personal protective equipment and social distancing of employees. But further action is needed to stabilize our meat supply chain, and USMEF greatly appreciates the Trump administration’s prioritization of safe and consistent meat production and processing during this difficult time.”

Under the Executive Order and the authority of the Defense Production Act, USDA will work with meat processing to affirm they will operate in accordance with the CDC and OSHA guidance, and then work with state and local officials to ensure that these plants are allowed to operate, according to U.S. Agriculture Secretary Sonny Perdue.

Of course, there can be a Grand Canyon’s worth of difference between packing and processing plants remaining open and operating at capacity. Until something approaching normalcy returns to beef packing, risk premiums will likely continued to be applied to fed cattle prices and paid for available beef.

“Estimated slaughter under federal inspection for the week was reported at a miniscule 425,000 head, which was 40,000 head less than last week and 248,000 head less than last year,” say AMS analysts. “During this week, fed steer and heifer slaughter was estimated some days at 50,000 head, which would be almost half of what can be done when plants are running at full capacity.”

Choice boxed beef cutout value was $84.08 higher week to week (+28.7%) on Friday at $377.45/cwt. Select was $78.11 higher (+28.0%) at $357.13.

Friday to Friday Change

Weekly Auction Receipts

 

May 1 Auction Direct

Video/net

Total
 

219,200

(+61,100)

75,500

(+15,100)

1,300

(-3,100)

296,900

(+73,100)

 

CME Feeder Index

CME Feeder Index* Apr. 30 Change
  $119.39 –   $0.09

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash May 1 Change
600-700 lbs. $146.92 –    $3.54
700-800 lbs. $134.09 –    $0.23
800-900 lbs. $122.53 –    $2.16

 

South Central

Steers-Cash May 1 Change
500-600 lbs. $149.35 –  $3.77
600-700 lbs. $136.02 –  $1.26
700-800 lbs. $122.17 –  $0.24

 

Southeast

Steers-Cash May 1 Change
400-500 lbs. $145.25 –  $3.81
500-600 lbs. $137.41 –  $2.08
600-700 lbs. $125.66 –  $3.13

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) May 1 ($/cwt) Change
Choice $377.45 + $84.08
Select $357.13 + $78.11
Ch-Se Spread $20.13 + $5.78

 

Futures

Feeder Cattle  May 1 Change
May $117.825 + $0.375
Aug $127.650 + $1.250
Sep $129.050 + $1.250
Oct $129.900 + $0.975
Nov $130.475 + $0.150
Jan ’21 $129.075 + $0.100
Mar $128.125 –  $1.625
Apr $129.475 n/a

 

Live Cattle   May 1 Change
Jun $87.250 + $4.625
Aug $92.550 + $3.650
Oct $96.800 + $2.325
Dec $100.975 + $2.550
Feb ’21 $105.375 + $2.525
Apr $107.525 + $2.350
Jun $101.250 + $2.050
Aug $101.050 + $1.550
Oct $103.000 n/a

 

Corn  May 1 Change
May $3.114 – $0.042
Jul $3.184 – $0.046
Sep $3.254 – $0.020
Dec $3.366 -0-
Mar ’21 $3.502 +$0.010
May $3.582 +$0.026

 

Oil CME-WTI May 1 Change
Jun $19.78 + $2.84
Jly $22.29 + $1.07
Aug $24.20 + $0.34
Sep $25.69 –  $0.02
Oct $26.79 + $0.02
Nov $27.74 + $0.07

 

Equities

Equity Indexes May 1 Change
Dow Industrial Average  23723.69 –     51.58
NASDAQ   8604.95 –     29.57
S&P 500    2830.71 –       6.03
Dollar (DXY)         98.79 –       1.50
May 3rd, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Apr. 24, 2020

Increased auction volume returned this week amid narrowly mixed trade as markets tried to sort through slowing beef production and volatile outside markets, in search of when and how the U.S. economy can reopen.

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

“Grazing calves have started to see their demand wane this week as turnout dates have come and gone. Bigger feeders seem to have stabilized and found some footing,” say AMS analysts.

Except for 27¢ higher in spot Apr and 47¢ lower in Aug, Feeder Cattle futures closed an average of $1.35 lower week to week on Friday (32¢ lower at the back to $2.15 lower).

“The soft prices (calves and feeders) primarily stem from the cattle market assembly line backing up or bottlenecking at the packer level,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The reduced slaughter levels are backing finished cattle up in the feedlot, which means there is limited pen space for new feeder cattle placements. Since there is little space to put feeder cattle, feedlot managers are not willing to bid very hard to pull those cattle out of the country and into their yards because then they have more mouths to feed and nowhere to go with the animals that need to be leaving. This also puts a strain on the calf market because some stocker and backgrounding operations are at capacity and not able to move their heavy feeders to the feedlot.”

Normally, the monthly Cattle on Feed report published Friday would be hailed as more than bullish with 22.69% fewer placements in March than the previous year, 13.11% more marketings in the month and an on-feed inventory Apr. 1 (11.20 million head) 5.49% less. Of course, the notion of normal left a ways back.

Fed Prices Crumble

The choke point of packing capacity grew last week as COVID-19 sidelined workers. According to AMS, the past three weeks of cattle slaughter account for three of the four sparsest weeks since mandatory price reporting began in 2001.

USDA estimated last week’s cattle slaughter at 469,000 head, which would be 6.6% less than the prior week and 26.9% less than the same week a year ago. Year to date, estimated cattle slaughter is 1.9% less than in 2019 at 10.16 million head.

“A backlog of fed cattle at this level will be impossible to eliminate in a timely fashion, resulting in fed supplies remaining above slaughter capacity for several months,” say AMS analysts. “Anecdotes of fed cattle being pulled ahead for slaughter by two to three weeks–around the beginning to middle of February– have now disintegrated to being two to three weeks behind. That is what happens when daily slaughter for the five-day workweek averages 85,000 head compared to 120,000 head.”

“There are no indications this situation will get better moving through the month of May, but the hope is the economy begins to reopen and health is not an issue,” Griffith says. “These are the only two things this market cares about right now. If these two things do not change, then prices will remain depressed, as will cattle feeders’ attitudes. If the economy does start to reopen, then it will be hitting grilling season square in the nose, which should provide support for finished cattle.”

Negotiated cash fed cattle trade for the week through Friday afternoon was $5-$10 lower on a live basis in the Southern Plains at $100/cwt. in Kansas and $95-$100 in the Texas Panhandle. It was up to $10 lower in Nebraska and the western Corn Belt at $95. Dressed trade was from $8 lower to $10 higher at mostly $160, compared to the previous week’s light test.

For all of the gyrations, five-area daily weighted average direct negotiated prices through Thursday were mainly steady week to week with live steers at $96.95 and dressed steers at $154.27.

Live Cattle futures closed an average of $2.83 lower week to week on Friday ($1.50 lower at the back to $9.67 lower in spot Apr).

On the other side of the trade, wholesale beef values screamed higher as buyers scrambled for declining supplies on the cusp of grilling season.

Choice boxed beef cutout value was $54.38 higher week to week on Friday at $293.37/cwt. Select was $51.82 higher at $279.02.

“At this time, plant reductions are mostly resulting in some product disruptions and perhaps temporary shortages of fresh meat,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly comments. “Barring a catastrophic combination of plant closures or extended periods of plant disruptions, significant shortages of meat are not expected. However, the combination of processing disruptions and the continuing challenges of supply chain disruptions means that consumers will likely experience limited meat supplies and selection in grocery stores in the coming weeks.”

Friday to Friday Change

Weekly Auction Receipts

 

Apr.24 Auction Direct

Video/net

Total
 

158,100

(+59,300)

60,400

(+11,000)

4,400

(-42,600)

222,900

(+27,700)

 

CME Feeder Index

CME Feeder Index* Apr. 23 Change
  $119.48 +   $3.73

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 24 Change
600-700 lbs. $150.46 –    $2.96
700-800 lbs. $134.32 +   $0.31
800-900 lbs. $124.69 +   $1.05

 

South Central

Steers-Cash Apr. 24 Change
500-600 lbs. $153.12 –  $0.02
600-700 lbs. $137.28 + $0.37
700-800 lbs. $122.41 + $1.15

 

Southeast

Steers-Cash Apr. 24 Change
400-500 lbs. $149.06 –  $1.31
500-600 lbs. $139.49 –  $1.44
600-700 lbs. $128.79 + $1.24

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr.24 ($/cwt) Change
Choice $293.37 + $54.38
Select $279.02 + $51.82
Ch-Se Spread $14.35 + $2.56

 

Futures

Feeder Cattle  Apr. 24 Change
Apr $119.800 + $0.275
May $117.450 –  $1.825
Aug $126.400 –  $2.000
Sep $127.800 –  $2.150
Oct $128.925 –  $1.900
Nov $130.325 –  $0.950
Jan ’21 $128.975 –  $0.325
Mar $129.750 –  $0.325

 

Live Cattle   Apr. 24 Change
Apr $84.975 –  $9.675
Jun $82.625 –  $3.675
Aug $88.900 –  $2.200
Oct $94.475 –  $1.650
Dec $98.425 –  $1.450
Feb ’21 $102.850 –  $1.650
Apr $105.175 –  $1.825
Jun $99.200 –  $1.850
Aug $99.500 –  $1.500

 

Corn  Apr. 24 Change
May $3.156 – $0.066
Jul $3.230 – $0.062
Sep $3.274 – $0.062
Dec $3.366 – $0.068
Mar ’21 $3.492 – $0.060
May $3.556 – $0.064

 

Oil CME-WTI Apr. 24 Change
May $16.94 –  $8.09
Jun $21.22 –  $8.20
Jly $23.86 –  $7.34
Aug $25.71 –  $6.37
Sep $26.77 –  $5.94
Oct $27.67 –  $5.63

 

Equities

Equity Indexes Apr. 24 Change
Dow Industrial Average  23775.27 –  467.22
NASDAQ    8634.52 –     15.62
S&P 500    2836.74 –     37.82
Dollar (DXY)      100.29 +      0.57
April 26th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Apr. 17, 2020

Calves and feeder cattle traded steady to higher last week as a sense of stability returned to Cattle futures and as hopes grew for the U.S. economy opening sooner rather than later as COVID-19 appeared to plateau.

Steers and heifers traded $5-$10/cwt. higher in the South Central region, according to the Agricultural Marketing Service (AMS). Prices were steady to $4 higher in the North Central and Southeast regions.

Auction receipts continued lighter than normal as some producers hold cattle, hoping markets will improve. Auction volume was less than 100,000 head for the third time in five weeks, according to AMS–about 18.5% less than in 2019 so far this year.

Except for unchanged in spot Apr and 47¢ lower in Aug, Feeder Cattle futures closed an average of $1.14 higher on Friday, compared to the previous Thursday (57¢ to $2.10 higher).

“The recommendation for most producers has been to hold on to cattle and try to lengthen the potential marketing window, and that recommendation holds today,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Unfortunately, there are producers that can no longer hold on to cattle, which limits their flexibility. One alternative some producers could consider is shipping cattle to the feedlot. This is a potential solution for producers who can afford to hold on to cattle and do not need the cash flow to sustain business operations. Several producers will need the cash flow, given they have been purchasing feed all winter, and fertilizer bills will be due sooner rather than later. These are the producers who are in the toughest position because there are very few alternatives. Many producers will simply have to make the best decision for today, given the available information. There is no reason to look back a month from now and wish the decision was different.”

Packing Constraints Pressure Fed Cattle Prices

Slowing beef packing and processing, due to COVID-19, pressured negotiated cash fed cattle prices amid a light test.

Live trades were mostly steady in the Southern Plains at mainly $105/cwt. They were steady to $11 lower in the north at $94-$105 in Nebraska and at $95-$105 in the western Corn Belt. Dressed sales were steady to $18 lower at $155-$165 in Nebraska and at $150-$168 in the western Corn Belt.

“The reduction in production means there is not as much need for cash cattle purchases to fill in production holes throughout the week, as many of these facilities are trying to make sure they get all of their contracted cattle processed with a limited labor resource in many instances,” Griffith explains. “What few cattle trade in the cash market will mean lower prices week-over-week, which will play into lower formula prices as well.”

“This predicament could result in a situation not previously seen in the beef industry,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his Monday market comments. At the time, JBS had closed its Greeley, CO plant for two weeks, according to the Colorado governor’s office.

“It may simply not be possible to slaughter animals in a timely manner,” Peel explained. “Last summer, the loss of a single packing plant in Kansas resulted in relatively little decrease in overall cattle slaughter as production was shifted to other plants; increased Saturday slaughter largely offset the loss of the fire-damaged plant. In the current situation, closure or reduced chain speeds across multiple plants may make it impossible to keep up with slaughter.”

Negotiated cash trade for the week was slightly less than 10,000 head (noon Friday), according to AMS. Those analysts say that would be the sparsest volume since mandatory livestock reporting began in 2001.

Except for 52¢ and 42¢ lower in Oct and Dec, Live Cattle futures closed an average of 90¢ higher from the previous Thursday through Friday (22¢ to $1.92 higher).

Between slower production and anemic returns, feedlot placements are likely to be lower year over year for the next several months, perhaps significantly lower. David Anderson, Extension livestock economist with Texas A&M University provided his outlook for the next Cattle on Feed report, in a webinar hosted by the Texas and Southwestern Cattle Raisers Association Friday afternoon. He sees March placements 20% less than the previous year, March marketings up near 13% and the Apr. 1 cattle on feed inventory being 5% less.

“One of the key factors moving forward will be pasture and range conditions,” say analysts with the Livestock Marketing Information Center, in the latest Livestock Monitor. “Good forage conditions will allow cattle to gain weight outside the feedlot and buy time, which at this point looks like a pivotal hedge/risk management option. If drought becomes an issue, it will force placements into feedlots even if economic conditions for feeding animals is weak. Cattle feeding returns are expected to be negative until fall 2020. Producers selling feeder animals in a drought market will likely face prices sharply below a year ago.”           

On the other side of the equation, reduced production from supply chain disruptions continues to lift wholesale beef values.

Choice boxed beef cutout value was $15.06 higher week to week on Friday at $238.99/cwt. Select was $18.87 higher at $227.20.

“From a consumer perspective, there is concern about meat availability at the local grocery store, while slaughter facilities are trying to manage around employee health and the agricultural producers who are supplying live animals to the facility. When slaughter levels are reduced then animals will start backing up in the feedlot or finishing barn,” says Griffith. “This means cattle feeders and hog finishers have to decide what to do with these animals. Most cattle feeders will feed cattle to heavier weights until they can physically move them to the slaughter facility. This means pen space is not opening up, which backs up feeder cattle and calves.”

Friday to Friday Change

Weekly Auction Receipts

 

Apr. 17 Auction Direct

Video/net

Total
 

98,800

(-141,00)

49,400

(-14,200)

47,000

(+42,400)

195,200

(+14,100)

 

CME Feeder Index

CME Feeder Index* Apr. 16 Change
  $115.75 –  $0.47

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 17 Change
600-700 lbs. $153.42 + $10.24
700-800 lbs. $134.01 +   $7.78
800-900 lbs. $123.64 +   $6.47

 

South Central

Steers-Cash Apr. 17 Change
500-600 lbs. $153.14 + $3.49
600-700 lbs. $136.91 –  $1.11
700-800 lbs. $121.26 + $1.03

 

Southeast

Steers-Cash Apr. 17 Change
400-500 lbs. $150.37 –  $0.57
500-600 lbs. $140.93 + $1.77
600-700 lbs. $127.55 –  $0.46

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr.17 ($/cwt) Change
Choice $238.99 + $15.06
Select $227.20 + $18.87
Ch-Se Spread $11.79 –    $3.81

 

Futures

Feeder Cattle  Apr. 17 Change
Apr $119.525 -0-
May $119.275 + $0.325
Aug $128.400 –  $0.475
Sep $129.950 + $0.575
Oct $130.825 + $0.925
Nov $131.275 + $1.325
Jan ’21 $129.300 + $2.100
Mar $130.075 + $1.625

 

Live Cattle   Apr. 17 Change
Apr $94.650 + $0.650
Jun $86.300 + $1.925
Aug $91.100 + $0.350
Oct $96.125 –  $0.525
Dec $99.975 –  $0.425
Feb ’21 $104.500 + $0.225
Apr $107.000 + $0.675
Jun $101.050 + $1.200
Aug $101.000 + $1.300

 

Corn  Apr. 17 Change
May $3.322 – $0.094
Jul $3.392 – $0.074
Sep $3.336 – $0.080
Dec $3.434 – $0.072
Mar ’21 $3.552 – $0.070
May $3.620 – $0.070

 

Oil CME-WTI Apr. 17 Change
May $18.27 –  $4.49
Jun $25.03 –  $3.79
Jly $29.42 –  $2.58
Aug $31.20 –  $1.92
Sep $32.08 –  $1.50
Oct $32.71 –  $1.25

 

Equities

Equity Indexes Apr. 17 Change
Dow Industrial Average  24242.29 + 523.12
NASDAQ    8650.14 +   496.56
S&P 500    2874.56 +   84.74
Dollar (DXY)         99.72 +      0.16
April 19th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Apr. 10, 2020

Auction receipts continued lighter last week as sellers of calves and feeder cattle sort their options amid bearish COVID-19 markets.

Feeder steers and heifers sold $3-$7/cwt. lower, according to the Agricultural Marketing Service (AMS).

Even though equity markets surged higher on increasing optimism about COVID-19 reaching a peak in this country, helping to drag Cattle futures higher, it had an overanxious, unrealistic feel.

Feeder Cattle futures closed an average of $9.98 higher week to week on Thursday, ($8.85 to $11.75 higher).

Andrew P. Griffith, agricultural economist at the University of Tennessee emphasizes and illustrates COVID-19 market volatility, in his weekly market comments.

“In three weeks, the price of the May Feeder Cattle contract declined from $135 to less than $110/cwt. It then took just five days for the contract price to jump back over $130. The sudden increase in price was then followed by eight days of struggling prices that actually saw some contracts trade below $105 at the first of this week,” Griffith explains. “The market price will likely continue this rollercoaster ride, but it will not be a fun one for most participants. The plan for most producers should be to remain calm and keep doing what is being done. There is no reason to have any kneejerk reactions at this time.”

Fed Cattle Prices Sag

Negotiated cash fed cattle prices ended up $7 lower on a live basis last week at $105/cwt. in the Southern Plains, according to AMS. Dressed trade in Nebraska and the western Corn Belt was $7-$12 lower at $168. A light test was noted in all regions.

“Last week’s negotiated purchases of slaughter steers and heifers nationwide (28,923 head) was the second smallest volume reported since mandatory reporting started in 2001,” say AMS analysts.“Slaughter levels were lower than in recent weeks as several facilities have been affected by worker attendance. Cattle slaughter under federal inspection was estimated at 536,000 head for the week, 90,000 less than the previous week and 103,000 less than a year ago.”

Live Cattle futures closed an average of $6.33 higher week to week on Thursday, from $1.17 higher in spot Apr to $8.82 higher.

“The strong basis continues to provide cattle feeders incentive to market cattle in a timely manner,” Griffith says, noting the wide discount of futures to cash.

“It looks like cattle trading this week will be trading at least $10/cwt. higher than the April Live Cattle contract, while the June Live Cattle contract is trading $9 lower than the April price. It is hard to imagine live cattle cash trade dipping into the mid to upper $80 area in the next two months, but that is what the futures market is predicting,” Griffith says.

Boxed Beef prices continued to decline. Choice boxed beef cutout value was $6.51 lower week to week on Friday at $223.93/cwt. Select was $7.51 lower at $208.33.

“One would expect these prices to continue to moderate in the coming weeks as the beef supply chain continues to adjust to the current situation of more retail beef buying and less food service purchases,” Griffith says. “However, the change in consumption patterns of retail versus food service is not the only hurdle to overcome. There have been several packing facilities that are reducing production or shutting down due to the coronavirus, which will most likely reduce production.”

Smithfield Foods, Inc. announced Sunday that its Sioux Falls, SD facility–one of the largest pork processing facilities in the U.S.–will remain closed until further notice.

“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply,” explained Kenneth M. Sullivan, Smithfield president and CEO.

According to various news sources, JBS is closing its beef packing plant in Greeley, CO through Tuesday of this week, for deep cleaning facilities and screening new workers. Reportedly, 36 JBS workers tested positive for COVID-19 infections through the end of last week.

“Unfortunately, COVID-19 cases are now ubiquitous across our country. The virus is afflicting communities everywhere. The agriculture and food sectors have not been immune,” Sullivan explained. “Numerous plants across the country have COVID-19 positive employees. We have continued to run our facilities for one reason: to sustain our nation’s food supply during this pandemic. We believe it is our obligation to help feed the country, now more than ever. We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19.”

Friday to Friday Change

Weekly Auction Receipts

 

Apr. 10 Auction Direct

Video/net

Total
 

112,900

(-66,200)

63,600

(+42,100)

4,600

(+4,100)

181,100

(-20,000)

 

CME Feeder Index

CME Feeder Index* Apr. 8 Change
  $116.79 –  $9.30

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 10 Change
600-700 lbs. $143.18 –  $5.42
700-800 lbs. $126.23 –  $6.33
800-900 lbs. $117.17 –  $3.53

 

South Central

Steers-Cash Apr. 10 Change
500-600 lbs. $149.65 –  $6.64
600-700 lbs. $138.02 –  $4.15
700-800 lbs. $120.23 –  $2.50

 

Southeast

Steers-Cash Apr. 10 Change
400-500 lbs. $150.94 –  $5.07
500-600 lbs. $139.16 –  $5.48
600-700 lbs. $128.01 –  $3.39

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr.10 ($/cwt) Change
Choice $223.93 –  $6.51
Select $208.33 –  $7.51
Ch-Se Spread $15.60 + $1.00

 

Futures

Feeder Cattle  Apr. 9 Change
Apr $119.525 + $8.850
May $118.950 + $7.300
Aug $128.875 + $11.225
Sep $129.375 + $11.525
Oct $129.900 + $11.750
Nov $129.950 + $11.275
Jan ’21 $127.200 + $8.950
Mar $128.450 + $8.950

 

Live Cattle   Apr. 9 Change
Apr $94.000 + $1.175
Jun $84.375 + $1.300
Aug $90.750 + $6.350
Oct $96.650 + $8.700
Dec $100.300 + $8.825
Feb ’21 $104.275 + $8.200
Apr $106.325 + $8.175
Jun $99.850 + $7.550
Aug $99.700 + $6.700

 

Corn  Apr. 9 Change
May $3.316 – $0.018
Jul $3.366 – $0.018
Sep $3.416 – $0.004
Dec $3.506 +$0.010
Mar ’21 $3.622 +$0.010
May $3.690 +$0.014

 

Oil CME-WTI Apr. 9 Change
May $22.76 –  $2.56
Jun $28.82 + $0.77
Jly $32.00 + $2.08
Aug $33.12 + $2.21
Sep $33.58 + $2.08
Oct $33.96 + $1.96

 

Equities

Equity Indexes Apr. 9 Change
Dow Industrial Average  23719.37 + 2305.93
NASDAQ    8153.58 +   666.27
S&P 500    2789.82 +   262.92
Dollar (DXY)         99.56 –         0.54
April 12th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Apr. 3, 2020

Seemingly bottomless Cattle futures prices cast a pall over cash markets last week, amid continued COVID-19 uncertainty.

Feeder steers sold $5-$17/cwt. lower in the North Central and South Central areas, according to the Agricultural Marketing Service (AMS). Feeder heifers in the same regions traded $7-$15 lower. Calves in the Southeast sold from steady to $5 higher early in the week to steady to $5 lower later in the week.

“Prices are tracking $10-$20 lower than a year ago,” say AMS analysts. “Demand was reported as moderate to good in auctions this week as buyers did want to procure cattle, just at lower price levels. Some backgrounders who sold yearlings did not recoup the first cost of those calves.”

Feeder Cattle futures closed an average of $11.36 lower week to week on Friday, ($7.45 lower at the back to $12.82 lower toward the front).

“Maybe even worse than the fact that prices (cash) are struggling is the extreme volatility in the futures market,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “In the past six weeks, the April Feeder Cattle futures contract traded from $142/cwt. down to $108. It then traded back over $130 before going back under $110. Such volatility makes it difficult for anyone to physically want to trade cattle.”

The AMS reporter on hand for this week’s sale at Green City Livestock Auction in Missouri aptly summed up the current market situation: “Volatile doesn’t seem a strong enough word to describe the situation anymore, as daily limit up and down moves at the CME are almost expected…Those big moves take all the confidence out of a cash market and make it difficult for producers to decide when to turn loose as well as for buyers to figure what one is worth.”

Fed Cattle Prices Sink

Negotiated cash fed cattle trade remained largely undeveloped through Friday afternoon. However, according to the Agricultural Marketing Service (AMS), there was a light test of live sales in all regions Wednesday at mostly $112/cwt. and at $175-$180 in the beef. That was $6-$8 less than last week on a live basis and $10-$15 less dressed.

“Last week’s prices were wildly higher and this week’s prices were wildly lower,” Griffith says. “The unknowns of the coronavirus are enough to result in huge price swings in the market but those movements would still imply market efficiency. Where the inefficiency comes in is when government officials begin telling people what to do and how to act…Technically, the market is still acting as efficiently as it can, but there are cattle producers being caught in the whiplash.”

Live Cattle futures closed an average of $6.47 lower week to week on Friday, from $4.00 lower at the back to $12.62 lower in spot Apr.

“A lot more market volatility is likely to come as the effects of COVID-19 ripple through our economy,” says David Anderson, Extension livestock economist at Texas A&M University, in the latest issue of In the Cattle Markets. “While we come to grips with all the demand implications it’s worth recognizing that it is occurring in the time of cyclically peak beef supplies.”

With two days left in the first quarter, Anderson explained, year over year: fed steer and heifer slaughter was up 5.4%; cow and bull slaughter was 4.5% higher; average steer dressed weights were 22.5 lbs. heavier; average heifer dressed weights were 13.7 lbs. heavier; cow weights were up 2.6 lbs. 

Wholesale beef values sank lower as it appeared the initial onslaught of increased retail demand was coming to an end.

Choice boxed beef cutout value was $22.40 lower week to week on Friday at $230.44/cwt. Select was $26.54 lower at $215.84.

“More and more states are ordering residents to stay at home, which means more meals are being prepared and consumed at home instead of away from home. One would think this change would influence meat consumption and meat disappearance,” Griffith says. “Boxed beef prices are still extremely strong, but they are likely to decline further and the extent of the price decline will likely depend on how long the current situation persists. Things are likely to get worse before they get better.”

Feed Prices Appear Friendly

Corn planted area for all purposes in 2020 is estimated at 97.0 million acres, which would be 8% more or 7.29 million acres more than last year. That’s according to USDA’s Prospective Plantings report. If realized, this will be the highest planted acreage since 2012, according to the National Agricultural Statistics Service. Acreage increases from last year of 800,000 or more are expected in Indiana, Illinois, Ohio, and South Dakota.

“Weather delays may change that number to the downside; reduced demand from ethanol will also be a contributing factor,” say AMS analysts. “As expected, U.S. ethanol production dramatically declined last week and reported the largest week-to-week decline ever recorded. Ethanol blender demand decreased again this week and is the lowest blender demand on record since they started collecting the data in 2010.”

As demand for oil declines and as oil prices declined further with the price war between the U.S. and Russia, ethanol demand follows suit, pressuring corn prices.

 

Friday to Friday Change

Weekly Auction Receipts

 

Apr. 3 Auction Direct

Video/net

Total
 

179,100

(+91,900)

21,500

(-500)

500

(-3,700)

201,100

(+87,700)

 

CME Feeder Index

CME Feeder Index* Apr. 2 Change
  $121.07 –  $9.37

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Apr. 3 Change
600-700 lbs. $148.60 –  $7.06
700-800 lbs. $132.56 –  $10.62
800-900 lbs. $120.70 –  $12.35

 

South Central

Steers-Cash Apr. 3 Change
500-600 lbs. $156.29 –  $5.01
600-700 lbs. $142.17 –  $3.63
700-800 lbs. $122.73 –  $14.31

 

Southeast

Steers-Cash Apr. 3 Change
400-500 lbs. $156.01 –  $2.21
500-600 lbs. $144.64 + $0.41
600-700 lbs. $131.40 –  $0.97

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Apr. 3 ($/cwt) Change
Choice $230.44 –  $22.40
Select $215.84 –  $26.54
Ch-Se Spread $14.60 + $4.14

 

Futures

Feeder Cattle  Apr. 3 Change
Apr $108.250 –  $12.350
May $108.100 –  $12.825
Aug $114.425 –  $12.675
Sep $115.800 –  $11.775
Oct $116.900 –  $11.625
Nov $117.550 –  $11.250
Jan ’21 $117.350 –  $10.900
Mar $120.250 –  $7.450

 

Live Cattle   Apr. 3 Change
Apr $88.325 –  $12.625
Jun $80.850 –  $8.575
Aug $84.300 –  $6.150
Oct $88.500 –  $5.825
Dec $92.350 –  $5.975
Feb ’21 $97.025 –  $5.600
Apr $99.950 –  $4.550
Jun $93.450 –  $4.975
Aug $93.000 –  $4.000

 

Corn  Apr. 3 Change
May $3.306 – $0.154
Jul $3.366 – $0.150
Sep $3.422 – $0.138
Dec $3.506 – $0.136
Mar ’21 $3.620 – $0.120
May $3.682 – $0.102

 

Oil CME-WTI Apr. 3 Change
May $28.34 + $6.83
Jun $30.90 + $5.75
Jly $32.33 + $4.20
Aug $33.00 + $2.95
Sep $33.37 + $2.07
Oct $33.62 + $1.48

 

Equities

Equity Indexes Apr. 3 Change
Dow Industrial Average  21052.53 –   584.25
NASDAQ    7373.08 –   129.30
S&P 500    2488.65 –     52.82
Dollar (DXY)      100.68 +    2.375
April 4th, 2020|Weekly Market Highlights|

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

Oversold conditions and atypically high wholesale beef prices, tied to the shift in more consumers eating at home, helped lift Cattle futures and negotiated cash fed cattle prices last week. In turn, cash calf and feeder cattle prices found some traction.

Steers and heifers sold $8-$15/cwt. higher, according to the Agricultural marketing Service (AMS). Auction receipts continued sparser than normal, stalled by understandable producer caution.

“Much of this stronger undertone is likely associated with the strong week that feeder cattle futures experienced and the strong week for live cattle sales,” explains Andrew P. Griffith, agricultural economist the University of Tennessee, in his weekly market comments.

Feeder Cattle futures closed an average of $2.12 higher week to week on Friday, not counting recently minted away Mar (65¢ higher at the back to $3.30 higher).

Except for 10¢ and 30¢ lower in two contracts, Live Cattle futures closed an average of 54¢ higher week to week on Friday, from 12¢ higher to $2.30 higher in spot Apr.

Extreme volatility continued, though, with limit-up and expanded limit-up moves early in the week and then limit-down and near-limit down moves toward the end of the week.

“Despite the stronger prices, the volatility in the futures market will keep many cattle producers on the sidelines as it should,” Griffith says. “…Market volatility is not a big issue for producers who do not have anything that needs to be marketed immediately, because they are only experiencing a loss in value of a commodity. Alternatively, those who must market cattle in the near term may actually experience that loss in value. As an example, a person with a load of feeder cattle two weeks ago may have been offered $10-$15/cwt. less for those animals than they may have been offered this week. That equates to a $5,000 to $7,500 difference in value over a two-week period on a 50,000 lb. load. The situation cattle producers are traversing right now is the exact reason price risk management should be included in a producer’s business plan.”

Fed Cattle Prices Climb

Wholesale beef values continued extraordinarily high last week, relative to supplies and seasonal expectations.

Choice boxed beef cutout value was 91¢ lower week to week on Friday at $252.84/cwt. Select was $2.21 higher at $242.38.

Wholesale price strength helped boost fed cattle prices. Week to week through Thursday, the five-area direct fed steer price was $9.64/cwt. higher on a live basis at $119.44. It was $16.20 higher in the beef at $189.31.

Regionally, negotiated cash fed cattle prices were mostly $8-$10 higher on a live basis at $118-$120/cwt. in the Southern Plains and $119-120 up north. Dressed sales were $15-$20 higher at $190.

“Slaughter cow prices skyrocketed early in the  week at auctions nationwide,” say AMS analysts. “Demand for boneless lean ground beef continued to move higher as cow plants needed product to move through the marketing chain to fill ground beef orders place by retailers. With most restaurants nationwide either closed or only filling carry out orders, grocery stores have had trouble finding enough protein products to fully stock their cases.”  

Earlier in the week, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, explained in his weekly market comments, “Disruptions in normal activities due to COVID-19 have produced a surge in at-home food demand. Recent reports indicate a 77% year-over-year increase in grocery meat sales in mid-March. The spike in grocery demand overwhelmed the retail meat supply chain, resulting in temporary shortages of meat in many grocery stores. The shortages are due to the tremendous logistical challenges of shifting meat supplies from food service channels to retail grocery channels.”

Peel emphasized for consumers that there is no shortage of beef or other meats. Beef, pork and poultry production was record large in the first quarter and is projected to be record large this year at 109.3 billion lbs., 4.3% more than last year.

“Beef production is projected to be 1.9% higher year over year in 2020, totaling 27.7 billion lbs.,” according to Peel. “Increased beef production is concentrated in the first half of the year. Total steer and heifer slaughter is up 3.9% year over year for the year to date. Steer carcass weights for the year to date are up over 21 lbs. year over year with heifer carcass weights up over 12 lbs. First-quarter beef production is estimated to increase 6.6% over last year.”

Uncertain domestic demand in tandem with increasing beef supplies helped pressure Live Cattle futures at the end of the week.

As Brenda Boetel, livestock economist at the University of Wisconsin-River Falls explained in the latest issue of In the Cattle Markets, “There is no evidence that consumers are eating more beef currently, and as such the demand will likely decrease significantly once the supply system catches up with the rush demand of the last few weeks.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 27 Auction Direct

Video/net

Total
 

87,200

(+28,200)

22,000

(+11,800)

4,200

(-12,300)

113,400

(+27,700)

 

CME Feeder Index

CME Feeder Index* Mar. 26 Change
  $130.44 + $9.06

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 27 Change
600-700 lbs. $155.66 + $9.05
700-800 lbs. $143.18 + $10.05
800-900 lbs. $133.05 + $7.41

 

South Central

Steers-Cash Mar. 27 Change
500-600 lbs. $161.30 + $15.04
600-700 lbs. $145.80 + $11.26
700-800 lbs. $137.04 + $16.31

 

Southeast

Steers-Cash Mar. 27 Change
400-500 lbs. $158.22 + $14.08
500-600 lbs. $144.15 + $10.65
600-700 lbs. $132.37 + $10.14

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 27 ($/cwt) Change
Choice $252.84 –  $0.91
Select $242.38 + $2.21
Ch-Se Spread $10.46 –  $3.12

 

Futures

Feeder Cattle  Mar. 27 Change
Apr $120.600 + $1.775
May $120.925 + $2.675
Aug $127.100 + $3.300
Sep $127.575 + $2.700
Oct $128.525 + $2.450
Nov $128.800 + $1.300
Jan ’21 $128.250 + $0.650
Mar $127.700 n/a

 

Live Cattle   Mar. 27 Change
Apr $100.950 + $2.300
Jun $89.425 –  $0.100
Aug $90.450 –  $0.300
Oct $94.325 + $0.325
Dec $98.325 + $0.125
Feb ’21 $102.625 + $0.225
Apr $104.500 + $0.125
Jun $98.425 + $0.300
Aug $97.000 + $0.350

 

Corn  Mar. 27 Change
May $3.460 – $0.024
Jul $3.516 – $0.022
Sep $3.560 – $0.014
Dec $3.642 – $0.010
Mar ’21 $3.740 – $0.008
May $3.784 – $0.010

 

Oil CME-WTI Mar. 27 Change
May $21.51 –  $1.12
Jun $25.15 + $0.79
Jly $28.13 + $2.20
Aug $30.05 + $2.95
Sep $31.30 + $3.28
Oct $32.14 + $3.34

 

Equities

Equity Indexes Mar. 27 Change
Dow Industrial Average  21636.78 +2463.30
NASDAQ    7502.38 +  622.86
S&P 500    2541.47 +  236.55
Dollar (DXY)      98.31 –        4.51
March 29th, 2020|Weekly Market Highlights|

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

Market carnage and uncertainty spawned by the COVID-19 panic prompted lots of calf and feeder cattle sellers last to hold cattle or offer fewer than they would otherwise. In fact, auction receipts were the least for a non-holiday week since the current report format was established in 2002, according to the Agricultural Marketing Service (AMS).

There were some week-to-week price gains for some classes at some auctions, but according to AMS, overall, steers and heifers sold $5-$10/cwt. lower, with instances of $12-$15 lower.

“It is likely feeder cattle receipts will continue to be light next week as cattle producers attempt to wait out the market suppression,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The risk in this is that there is no way to know how short or how long market prices will remain under pressure…The best advice today is for producers to keep one eye on the market and the other eye on national and world efforts to mitigate the length of this pandemic.”

Thanks to a late-week rally, supported by the extraordinary increase in wholesale beef values, Cattle futures closed higher week to week for the first time in five weeks.

Feeder Cattle futures closed an average of $4.47 higher week to week on Friday (2.60 higher to $7.72 higher in spot Mar).

Except for 22¢ and 50¢ lower in two contracts, Live Cattle futures closed an average of $1.06 higher week to week on Friday 42¢ higher to $3.07 higher in spot Apr).

The monthly Cattle on Feed report published Friday should be supportive, mirroring pre-report expectations. February placements for feedlots with 1,000 head or more capacity were 1.71 million head, which was 7.91% less (-147,000 head) than the previous year. Marketings in February of 1.77 million head were 5.47% more (+92,000 head) than the previous year. The on-feed inventory Mar. 1 of 11.81 million head was 0.18% more (+21,000 head), compared to a year earlier.

Fed Cattle Prices Firm

When all was said and done, negotiated cash fed cattle trade last week was steady to $2 higher on a live basis at $110-$112/cwt. and fully steady in the beef at $175.

According to the Texas Cattle Feeders Association on Friday, “Tyson announced this afternoon that for all fed cattle harvested next week, they will make a one-time assistance payment to cattle feeders of $5/cwt. live and $7.94/cwt. dressed.”

Choice boxed beef cutout value was $45.61 higher week to week on Friday at $253.75/cwt. Select was $38.19 higher at $240.17.

That’s the fastest rally on record, according to AMS analysts.

“As businesses and schools continue to close, along with restaurants, consumers swarmed the meat cases to stockpile protein items. Reports of empty meat cases started last week, all over the country,” AMS analysts explain. “The magnitude of the buying caught retailers by surprise, and as this consumer-driven market rages on, it appears that the cutout will be volatile in the short term.”

“There will be a variety of impacts on markets for specific beef products,” explained Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For example, increased demand for ground beef has resulted in local shortages of product at grocery stores, while reduced restaurant demand may result in weaker middle meat sales. We can expect significant disruptions and stress on beef supply chains given the consumption changes associated with requirements to control COVID-19.”

Should the labor forces of beef packing, processing, or shipping be directly impacted by COVID-19, Peel says supply chain disruptions could be more significant.

“The dynamics of the beef market have changed the past couple of weeks, which is what is driving market prices,” Griffith explains. “Restaurants and food retailers demand different cuts; packers have had to adjust to meet these needs because of the change in consumption patterns across the nation. Thus, packers are taking advantage of what the market is offering them at this time. The market is offering lower cattle prices and strong prices for beef cuts that go to grocery stores. The market is not offering as much value for beef cuts that would typically enter the restaurant business. The market will adjust as more and more unknowns are resolved.”

Equity Markets Continue Lower

Despite fiscal stimulus announced so far, U.S. financial markets continue to plunge lower.

Week to week on Friday, the Dow Jones Industrial Average closed 4,012 points lower. The broader S&P 500 closed 406 points lower.

Keep in mind, the collapse in crude oil prices adds to the overall economic weakness. Although already under pressure from softer demand and plentiful supplies, OPEC added undue and unexpected price pressure when it decided to increase production in retaliation against Russia.

Week to week on Friday, West Texas Intermediate Crude Oil futures on the CME were an average of $7.87 lower through the front six contracts.

“The uncertainty in the cattle market and most other markets persist as market participants try to determine the true impact from coronavirus. As more and more information becomes available, the market will continue to try to find an equilibrium point,” Griffith says. “The market will eventually find that equilibrium. However, it may take longer than some expect because market participants are treading through unfamiliar and murky water.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 20 Auction Direct

Video/net

Total
 

59,000

(-139,200)

10,200

(-11,800)

16,500

(+14,600)

85,700

(-135,400)

 

CME Feeder Index

CME Feeder Index* Mar. 19 Change
  $121.38 –  $6.53

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 20 Change
600-700 lbs. $146.61 –  $4.89
700-800 lbs. $133.13 –  $2.75
800-900 lbs. $125.64 –  $0.21

 

South Central

Steers-Cash Mar. 20 Change
500-600 lbs. $146.26 –  $11.93
600-700 lbs. $134.54 –  $9.31
700-800 lbs. $120.73 –  $5.46

 

Southeast

Steers-Cash Mar. 20 Change
400-500 lbs. $144.14 –  $11.31
500-600 lbs. $133.50 –  $9.63
600-700 lbs. $122.23 –  $10.11

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 20 ($/cwt) Change
Choice $253.75 + $45.61
Select $240.17 + $38.19
Ch-Se Spread $13.58 + $7.42

 

Futures

Feeder Cattle  Mar. 20 Change
Mar $120.725 + $7.725
Apr $118.825 + $6.225
May $118.250 + $3.775
Aug $123.800 + $2.625
Sep $124.875 + $2.600
Oct $126.075 + $3.150
Nov $127.500 + $4.250
Jan ’21 $127.600 + $5.450

 

Live Cattle   Mar. 20 Change
Apr $98.650 + $3.075
Jun $89.525 –  $0.225
Aug $90.750 + $1.575
Oct $94.000 + $0.200
Dec $98.200 –  $0.500
Feb ’21 $102.400 + $0.425
Apr $104.375 + $0.575
Jun $98.125 + $0.575
Aug $96.650 + $1.000

 

Corn  Mar. 20 Change
May $3.436 – $0.220
Jul $3.494 – $0.190
Sep $3.546 – $0.130
Dec $3.632 – $0.098
Mar ’21 $3.732 – $0.094
May $3.774 – $0.100

 

Oil CME-WTI Mar. 20 Change
Apr $22.43 –  $9.30
May $22.63 –  $9.48
Jun $24.36 –  $8.23
Jly $25.93 –  $7.22
Aug $27.10 –  $6.64
Sep $28.02 –  $6.34

 

Equities

Equity Indexes Mar. 20 Change
Dow Industrial Average  19173.18 –  4012.44
NASDAQ    6879.52 –    995.36
S&P 500    2304.92 –    406.10
Dollar (DXY)      102.00 +        3.31
March 21st, 2020|Weekly Market Highlights|

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

There are market guttings, then there’s last week as panic over COVID-19 wreaked havoc.

Week to week on Friday:

Feeder Cattle futures closed an average of $17.48 lower.

Live Cattle futures closed an average of $11.32 lower.

The Dow Jones Industrial Average closed 2,679 points lower. The S&P 500 closed 261 points lower. The NASDAQ was down 700 points. And that was after a significant rally Friday.

West Texas Intermediate Crude Oil futures on the CME were an average of $8.98 lower through the front six contracts.

“The sheer uncertainty in the worldwide marketplace is driving a massive downward trend in the livestock sector,” explained analysts with the Agricultural Marketing Service (AMS). “The CME Cattle Complex has taken the brunt of losses in the ag sector, but grains have reported losses as well.”

Nationwide, steers and heifers sold $5-$10/cwt. lower, according to AMS. Declines were significantly steeper at some auctions. Producers cancelling consignments was common.

“The calf market is easily $10-$12/cwt. lower than where it was expected to be this time a couple of months ago,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The question on every market participants mind is when the fortunes of the market will turn in favor of increasing prices. The answer is that it may take a while for the coronavirus scare to subside, which means it may take a while for the market to return to normalcy.”

As such, Griffith says it’s difficult to recommend anyone sell calves in such a market. On the other hand, he points out even more dollars will be lost by holding cattle if the market fails to rebound.

Perhaps thanks to trade taking place earlier in the week, negotiated cash fed cattle trade was established at $110/cwt. on a live basis last week, which was $3 lower in the Southern Plains and Nebraska; $2-$5 lower in the western Corn Belt. Dressed sales were $5-$7 lower at $175-$176. There were trades at lower money later in the week, but too few to trend.

Wholesale beef values continue to fade much of the market pressure. Choice boxed beef cutout value was 67¢ higher week to week on Friday at $208.14/cwt. Select was 59¢ lower at $201.98.

“As more and more events are canceled, suspended, or postponed, fewer patrons will be making their way to restaurants and eating meals away from home,” Griffith says. “As consumer movement declines, there will likely be more meals consumed at home. Will these meals include beef as the main course or will consumers move to other meats such as poultry and pork? Regardless of what meats are consumed at home, record meat production is expected in the United States this year, and clearing the market will take increased consumption domestically and moving meat overseas.”

Although no one would be surprised to see reduced U.S. beef exports in February and March, as the world deals with COVID-19, the year began positively, offering optimism once business disruptions fade.

U.S. beef exports in January were 2.5% more than a year earlier at 107,347 metric tons (mt) and export value was 5% more at $672.7 million according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

In fact, beef muscle cut exports were the highest ever for the month of January at 81,342 mt, up 4% from a year ago, while muscle cut value increased 5% to $589.2 million.

Export value per head of fed slaughter was $302.93, up 3% from a year ago.

 

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 13 Auction Direct

Video/net

Total
 

174,600

(-4,600)

22,000

(-24,000)

1,900

(-26,400)

198,500

(-55,700)

 

CME Feeder Index

CME Feeder Index* Mar. 12 Change
  $127.91 –  $5.96

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 13 Change
600-700 lbs. $151.50 –  $5.22
700-800 lbs. $135.88 –  $7.77
800-900 lbs. $125.85 –  $6.77

 

South Central

Steers-Cash Mar. 13 Change
500-600 lbs. $158.19 –  $8.56
600-700 lbs. $143.85 –  $5.12
700-800 lbs. $126.19 –  $10.61

 

Southeast

Steers-Cash Mar. 13 Change
400-500 lbs. $155.45 –  $8.36
500-600 lbs. $143.13 –  $8.20
600-700 lbs. $132.34 –  $7.25

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 13 ($/cwt) Change
Choice $208.14 + $0.67
Select $201.98 –  $0.59
Ch-Se Spread $6.16 + $1.26

 

Futures

Feeder Cattle  Mar. 13 Change
Mar $113.000 –  $17.700
Apr $112.600 –  $17.450
May $114.475 –  $16.750
Aug $121.275 –  $17.225
Sep $122.275 –  $17.650
Oct $122.925 –  $17.775
Nov $123.250 –  $17.750
Jan ’21 $122.150 –  $17.525

 

Live Cattle   Mar. 13 Change
Apr $95.575 –  $10.175
Jun $89.750 –  $10.275
Aug $89.175 –  $11.900
Oct $93.800 –  $12.400
Dec $98.700 –  $11.775
Feb ’21 $101.975 –  $11.475
Apr $103.800 –  $11.200
Jun $97.550 –  $11.325
Aug $95.650 –  $11.325

 

Corn  Mar. 13 Change
Mar  $3.706 – $0.066
May $3.656 – $0.104
Jul $3.684 – $0.108
Sep $3.676 – $0.098
Dec $3.730 – $0.084
Mar ’21 $3.826 – $0.090

 

Oil CME-WTI Mar. 13 Change
Apr $31.73 –  $9.55
May $32.11 –  $9.40
Jun $32.59 –  $9.18
Jly $33.15 –  $8.89
Aug $33.74 –  $8.59
Sep $34.36 –  $8.28

 

Equities

Equity Indexes Mar. 13 Change
Dow Industrial Average  23185.62 –  2796.16
NASDAQ    7874.88 –   700.74
S&P 500    2711.02 –    261.35
Dollar (DXY)        98.69 +       2.60
March 16th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Mar. 6, 2020

Extreme volatility reigned in Cattle futures and equity markets again last week as folks grapple with the unknowable eventual economic impact of COVID-19.

“The main unknown that markets are concerned with is in relationship to demand for consumer goods,” explains Andrew P. Griffith, agricultural economist at the University of Missouri, in his weekly market comments. “Meat markets are trying to figure out how demand for meat in the food service industry will be influenced, and if any losses in that sector will be offset by gains at grocery stores and other similar retail food outlets. Additional unknowns about markets and the virus itself lead to even more uncertainty and the tendency to undervalue commodity goods.”

Nationwide, calves and feeders traded from $2 lower to $3 higher, according to the Agricultural Marketing Service (AMS).

That was despite another horrendous week for Cattle futures.

Except for 57¢lower in spot Mar, Feeder Cattle futures closed an average of $3.30 lower week to week. After the spot month, that makes for an average decline of $11.04 in the last two weeks.

Live Cattle futures closed an average of $1.81 lower week to week on Friday ($1.17 lower toward the front to $2.82 lower at the back). That’s an average of $8.15 lower in the last two weeks.

AMS analysts point out the April Live Cattle contract lost $18.55 since Jan. 24, while the June contract gave up $16—equivalent to more than $200 per head, basis a steer at 1,300 lbs.

Fed Cattle Prices Erode Further

Negotiated cash fed cattle trade ended up $2 lower on a live basis last week in Nebraska and the Southern Plains at $113/cwt. It was $1 higher to $2 lower in the western Corn Belt at $113-$115. Dressed trade was $5 lower in Nebraska at $180-$182; steady to $5 lower at the same money in the western Corn Belt.

Wholesale beef values appeared to turn the seasonal corner. Week to week on Friday, Choice boxed beef cutout value was $2.17 higher at $207.47/cwt. Select was $3.66 higher at $202.57.

“As the beef market wades through the uncertainty of coronavirus, it is clear that higher grading beef is taking a bigger hit than lower grading beef, while seasonal trends are also weighing heavily on beef that is grading Choice or higher,” Griffith explains. “From November 2019 through February, the monthly Prime beef cutout value declined from $256 to $224/cwt., while the branded beef cutout value slipped from $240 to $214.

“The Choice cutout responded similarly with the composite value declining from $233 to $210 over that four-month period. Alternatively, the Select cutout price in November was $212 and traded close to $207 in February, while ungraded beef was at $200 in November and $194 in February.”

One bright spot is that cattle slaughter continues at an aggressive pace.

Last week’s cattle slaughter, estimated at 647,000 head—20,000 head more than the previous week and 40,000 head more than last year—was the most for the week since 2008, according to AMS.

Looking Ahead

Near term, at least the next 30-60 days, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University believes producers should expect markets to remain weak, if not weaker.

“It seems unlikely that any definitive news is forthcoming, certainly not in the next few weeks, which would allow markets to bounce back with any confidence,” Peel explains in his weekly market comments. “I don’t think we are ready yet to change the overall outlook for the year, but the prospect is growing that we might have to trim back our expectations for 2020.

“Producers probably should not make dramatic changes to production and marketing plans just yet, but it would be a good idea to think about how you will adjust things if we have to shift from offense to defense for the entire year.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Mar. 6 Auction Direct

Video/net

Total
 

179,900

(-22,800)

46,000

(-21,000)

28,300

(+27,100)

254,200

(-16,700)

 

CME Feeder Index

CME Feeder Index* Mar. 5 Change
  $133.87 –  $1.73

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Mar. 6 Change
600-700 lbs. $156.72 –  $0.15
700-800 lbs. $143.65 + $0.91
800-900 lbs. $132.62 –  $1.59

 

South Central

Steers-Cash Mar. 6 Change
500-600 lbs. $166.75 + $3.33
600-700 lbs. $148.97 + $1.58
700-800 lbs. $136.80 + $1.08

 

Southeast

Steers-Cash Mar. 6 Change
400-500 lbs. $163.81 + $1.52
500-600 lbs. $151.33 + $0.66
600-700 lbs. $139.59 + $1.52

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Mar. 6 ($/cwt) Change
Choice $207.47 + $2.17
Select $202.57 + $3.66
Ch-Se Spread $4.90 –  $1.49

 

Futures

Feeder Cattle  Mar. 6 Change
Mar $130.700 –  $0.575
Apr $130.050 –  $2.650
May $131.150 –  $2.375
Aug $138.500 –  $3.050
Sep $139.925 –  $3.600
Oct $140.700 –  $4.125
Nov $141.025 –  $4.625
Jan ’21 $139.675 –  $2.675

 

Live Cattle   Mar. 6 Change
Apr $105.750 –  $1.825
Jun $100.025 –  $1.175
Aug $101.175 –  $1.100
Oct $106.200 –  $1.325
Dec $110.475 –  $1.800
Feb ’21 $113.450 –  $2.175
Apr $115.000 –  $2.150
Jun $108.875 –  $1.925
Aug $106.975 –  $2.825

 

Corn  Mar. 6 Change
Mar  $3.772 +$0.108
May $3.760 +$0.078
Jul $3.792 +$0.068
Sep $3.774 +$0.050
Dec $3.814 +$0.044
Mar ’21 $3.916 +$0.042

 

Oil CME-WTI Mar. 6 Change
Apr $41.28 –  $3.48
May $41.51 –  $3.43
Jun $41.77 –  $3.33
Jly $42.04 –  $3.19
Aug $42.33 –  $3.02
Sep $42.64 –  $2.82

 

Equities

Equity Indexes Mar. 6 Change
Dow Industrial Average  25864.78 +  455.42
NASDAQ    8575.62 +       8.25
S&P 500    2972.37 +      18.15
Dollar (DXY)        96.09 –        2.04
March 8th, 2020|Weekly Market Highlights|

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

Accelerating panic about the impact novel coronavirus—Coronavirus Disease 2019 (COVID-19)—will have on the domestic and global economies drove equities and futures markets steeply lower last week amid harshly volatile trade.

Wall Street folks say it was the worst week for equities since the Great Recession in 2008. Week to week on Friday: the Dow Jones Industrial Average closed 3,513 points lower; the NASDAQ was down 1,189 points and the broader S&P 500 closed 383 points lower.

West Texas Intermediate Crude Oil futures on the CME sank an average of $8.27 lower week to week, through the first six contracts.

Then there was cash cattle and futures prices.

“U.S. cattle markets were affected immediately as beef demand is expected to be hindered in the near term,” say AMS analysts. 

Cash calf and feeder cattle prices were $4-$10 lower in the North Central and South Central regions, according to the Agricultural Marketing Service (AMS). Prices in the Southeast were $2-$4 lower. Some producers cancelled consignments at various auctions, wanting to see how the dust settles.

Feeder Cattle futures closed an average of $7.74 lower week to week on Friday, from $5.50 lower at the back to $9.40 lower toward the front.

Thursday to Thursday, the CME Feeder Cattle Index sank $6.48 to $135.60. That’s a touch lower than any time since the Tyson plant fire.

Live Cattle futures closed an average of $6.34 lower week to week on Friday, from $3.70 lower at the back to $10.67 lower in new spot Apr.

“The April live cattle contract is trading at a $6.50 discount compared to the week’s cash price, which is contrary to seasonal trends for finished cattle,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “That same April contract which traded over $124 from the beginning of November until the third week of January, and actually exceeded $128 a few times, is now trading near $109/cwt.”

For perspective, the week following last August’s fire at the Tyson packing plant in Kansas:Feeder Cattle futures closed an average of $5.48 lower, the CME Feeder Cattle Index was down $4.06 at $137.60 and Live Cattle futures closed an average of $6.53 lower.

Although COVID-19 and a packing plant fire are completely different, the uncertainty spawned is similar. In the case of the former, it’s a matter of not knowing how far the virus will spread, how fast, when the likely pandemic will end and how much economic destruction will be wrought, from slowing economic growth, to displaced and delayed demand, to supply chain disruptions (see below).

“Producers must take advantage of the opportunities being offered by the market and buying is the opportunity being offered right now,” Griffith says. “In the short term, the predictability of the market, given today’s environment, is essentially null and void. However, longer-term predictability of market direction just became easier. With a total collapse in the market, the only direction the market can move with a longer term outlook is in a positive direction.”

Griffith suggests now might be a good time to consider hedging strategies related to purchasing cattle in the summer and fall months. Conversely, he emphasizes it’s not the time to hedge the sale of cattle in the summer and fall.

“There is a lot of time between March and August for this market to overcome the news of the coronavirus and bounce back to a favorable market price, when discussing feeder cattle,” Griffith says.

Fed Cattle Prices Start Lower and then Lose More Ground

Through Friday afternoon, negotiated cash fed cattle prices for the week were $4-$5 less on a live basis at $115/cwt. in the Southern Plains and Nebraska. Dressed trade was $3-$5 less in Nebraska at $185-$187 and mostly $7 lower in the western Corn belt at mainly $183.

All things considered, wholesale beef values held their own.Choice boxed beef cutout value was 21¢higher week to week on Friday at $205.30/cwt. Select was $2.79 lower at $198.91.

Moreover, Griffith points out packer cow and bull prices remain resilient.

“The market needs lean grinding beef and this need has resulted in strong slaughter cow and bull prices,” Griffith says. “Prices are expected to continue to increase the next few months, but some producers may find it advantageous to go ahead and move some of these cows that are consuming valuable hay and forage resources.”

COVID-19 Continues to Spread

COVID-19 has been front-page news since it was first identified in China in December-January. Besides its ongoing global spread last week’s heightened market panic seemed to stem from Centers for Disease Control and Prevention (CDC) reports.

In its situation summary Tuesday, CDC  officials explained, “For the general American public, who are unlikely to be exposed to this virus at this time, the immediate health risk from COVID-19 is considered low. However, it’s important to note that current global circumstances suggest it is likely that this virus will cause a pandemic…”

CDC defines a pandemic as: “A global outbreak of a new influenza A virus. Pandemics happen when new (novel) influenza A viruses emerge which are able to infect people easily and spread from person to person in an efficient and sustained way.” There were four pandemics in the last 100 years, according to CDC.

Wednesday evening, CDC confirmed an infection with the virus that causes COVID-19 in California, in a person who reportedly did not have relevant travel history or exposure to another known patient with COVID-19.

“It’s possible this could be an instance of community spread of COVID-19, which would be the first time this has happened in the United States,” according to the CDC statement. “Community spread means spread of an illness for which the source of infection is unknown. It’s also possible, however, that the patient may have been exposed to a returned traveler who was infected.” So far there are 15 confirmed COVID-19 cases in the U.S.

Over the weekend, the first Covid-19-related death was reported in the U.S. As other nation’s reported their first infections, some counties heightened travel restrictions and population movement.

Late Friday, Federal Reserve Chair Jerome H. Powell issued this statement:

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 28 Auction Direct

Video/net

Total
 

202,700

(-37,400)

67,000

(+30,900)

1,200

(-37,700)

270,900

(-44,200)

 

CME Feeder Index

CME Feeder Index* Feb. 27 Change
  $135.60 –  $6.48

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 28 Change
600-700 lbs. $156.87 –  $4.80
700-800 lbs. $142.74 –  $6.59
800-900 lbs. $134.21 –  $5.08

 

South Central

Steers-Cash Feb. 28 Change
500-600 lbs. $163.42 –  $9.72
600-700 lbs. $147.39 –  $6.67
700-800 lbs. $135.72 –  $5.70

 

Southeast

Steers-Cash Feb. 28 Change
400-500 lbs. $163.42 –  $9.72
500-600 lbs. $147.39 –  $9.67
600-700 lbs. $135.72 –  $5.70

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 28 ($/cwt) Change
Choice $205.09 + $0.21
Select $201.70 –  $2.79
Ch-Se Spread $3.39 + $3.00

 

Futures

Feeder Cattle  Feb. 28 Change
Mar $131.275 –  $8.925
Apr $132.700 –  $9.400
May $133.525 –  $9.325
Aug $141.550 –  $8.125
Sep $143.525 –  $7.475
Oct $144.825 –  $6.975
Nov $145.600 –  $6.200
Jan ’21 $142.350 –  $5.500

 

Live Cattle   Feb. 28 Change
Feb  $112.700 –  $7.025
Apr $107.575 –  $10.675
Jun $101.200 –  $9.075
Aug $102.275 –  $7.125
Oct $107.525 –  $5.750
Dec $112.275 –  $5.250
Feb ’21 $115.625 –  $4.375
Apr $117.150 –  $4.125
Jun $110.800 –  $3.700

 

Corn  Feb. 28 Change
Mar  $3.664 –  $0.106
May $3.682 –  $0.124
Jul $3.724 –  $0.110
Sep $3.724 –  $0.096
Dec $3.770 –  $0.090
Mar ’21 $3.874 –  $0.078

 

Oil CME-WTI Feb. 28 Change
Apr $44.76 –  $8.62
May $44.94 –  $8.56
Jun $45.10 –  $8.44
Jly $45.23 –  $8.27
Aug $45.35 –  $8.02
Sep $45.46 –  $7.74

 

Equities

Equity Indexes Feb. 28 Change
Dow Industrial Average  25409.36 –   3513.05
NASDAQ    8567.37 –   1189.22
S&P 500   2954.22 –     383.53
Dollar (DXY)        98.13 –          1.13
March 2nd, 2020|Weekly Market Highlights|

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

Despite plenty of pressure and uncertainty in futures and equity markets, cash calf and feeder cattle prices surged higher last week. In fact, regional feeder steer prices in all regions were higher year-over-year for the first time in a long spell, according to the National Weekly Feeder and Stocker Cattle Summary from AMS.

Nationwide, steers and heifers sold $2-$6/cwt. higher, with some auctions from the Northern Plains to the Southern Plains quoting double digit gains, according to the Agricultural Marketing Service (AMS).

“Newfound optimism and warmer weather brought out buyers ready to take on grazing calves,” AMS analysts explain. “Many auction reports made note of the condition of cattle and alluded that buyers were hoping for compensatory gain as soon as the cattle got off the truck.”

“The hope and expectation that 500-550 lbs. steers could reach as high as $160/cwt. this spring is back in play,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Concern was beginning to creep in as the market struggled through the end of January and the first couple of weeks in February, but optimism is back on the table…the thought is that calf prices will continue to escalate for at least three to five weeks before softening.”

Early-week optimism was tied to the rebound in Cattle futures. By the last two trading sessions, though, Cattle futures moved lower, pressured in part by resurgent fears about the impact of novel coronavirus on the global economy, as well as recognition that positive feeding weather is boosting beef production.

Except for $1.67 higher and 72¢higher in the front two contracts, Feeder Cattle futures closed an average of 69¢lower week to week on Friday.

In the meantime, Griffith points out the cull cow market is gaining some steam.

“Breaker-grade cattle exceeded $62/cwt. on average this week with higher dressing cattle exceeding the $70 price mark,” Griffith explains. “The price of slaughter cows is also expected to continue increasing, but the current market may offer some producers an opportunity to offload animals that are consuming valuable feed resources. Fall calving producers should consider pregnancy evaluation this spring and market open animals on what is likely to result in a strong salvage value.”

Fed Cattle Prices Mostly Steady

Negotiated cash fed cattle trade ended the week steady to $1 higher on a live basis at $120/cwt. in the Southern Plains and $119-$120 in the north. Dressed trade was steady at $190.

Live Cattle futures closed an average of $1.49 lower through the front four contracts week to week on Friday. They were an average of 63¢lower across the rest of the board.

Near term, increased slaughter numbers and heavier carcass weights year over year, magnified by the mostly open winter so far are keeping a firmer seasonal lid on wholesale beef prices.

Choice boxed beef cutout value was $3.00 lower week to week on Friday at $205.09/cwt. Select was $4.01 lower at $201.70.

The average steer dressed weight in January was 904 lbs., according to USDA’s monthly Livestock Slaughter report. That was 18 lbs. more than the same month a year earlier. The average dressed heifer weight of 833 lbs. was 9 lbs. more than a year earlier.

Commercial beef production in January was 2.39 billion lbs., which was 78.7 million lbs. more (+3.41%) than the same time a year earlier. Total commercial red meat production for the month was 257.7 million lbs. more (+5.48%) at 4.96 billion lbs.

“There is no doubt that beef demand has been strong since the drought in 2012 and 2013. However, many cattle producers are probably asking why they are not benefiting more from strong demand in the form of higher cattle prices,” Griffith says. “The answer to that lies on the supply side of the equation. Producers responded to high cattle prices by increasing beef supply. Beef production in 2019 was nearly 3.5 billion pounds greater (+14.6%) than in 2015 when the demand index hit 112. Thus, cattle prices are lower.”

Fewer Feedlot Placements than Expected

Feedlots placed fewer cattle in January year over year, according to the monthly USDA Cattle on Feed report released Friday. The report is for feedlots with 1,000 head or more capacity.

Cattle feeders placed 1.96 million head in January, which was 0.61% less (-12,000 head) than the previous year. Ahead of the report, estimates were for placements to be up about 2%.

Marketings in January of 1.93 million head were 1.10% more (+21,000 head) than a year earlier.

Cattle on feed Feb. 1 of 11.93 million head were 2.16% (+252,000 head) more than a year earlier.

Both marketings and the on-feed inventory were close to pre-report estimates.

 

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 21 Auction Direct

Video/net

Total
 

240,100

(+48,300)

36,100

(+6,100)

38,900

(+33,900)

315,100

(+88,300)

 

CME Feeder Index

CME Feeder Index* Feb. 20 Change
  $142.08 +  $1.48

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 21 Change
600-700 lbs. $161.67 + $3.52
700-800 lbs. $149.33 + $5.11
800-900 lbs. $139.29 + $2.74

 

South Central

Steers-Cash Feb. 21 Change
500-600 lbs. $173.14 + $5.62
600-700 lbs. $154.06 + $3.71
700-800 lbs. $141.42 + $1.49

 

Southeast

Steers-Cash Feb. 21 Change
400-500 lbs. $166.56 + $5.82
500-600 lbs. $152.89 + $5.20
600-700 lbs. $139.59 + $4.44

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 21 ($/cwt) Change
Choice $205.09 –  $3.00
Select $201.70 –  $4.01
Ch-Se Spread $3.39 + $1.01

 

Futures

Feeder Cattle  Feb. 21 Change
Mar $140.200 + $1.675
Apr $142.100 + $0.725
May $142.850 –  $0.350
Aug $149.675 –  $0.525
Sep $151.000 –  $0.500
Oct $151.800 –  $0.550
Nov $151.800 –  $0.750
Jan ’21 $147.850 –  $1.475

 

Live Cattle   Feb. 21 Change
Feb ’20 $119.725 –  $1.100
Apr $118.250 –  $2.075
Jun $110.275 –  $1.725
Aug $109.400 –  $1.075
Oct $113.275 –  $0.375
Dec $117.525 –  $0.575
Feb ’21 $120.000 –  $0.750
Apr $121.275 –  $0.900
Jun $114.500 –  $0.550

 

Corn  Feb. 21 Change
Mar ’20 $3.770 –  $0.006
May $3.806 –  $0.014
Jul $3.834 –  $0.020
Sep $3.820 –  $0.022
Dec $3.860 –  $0.026
Mar ’21 $3.952 –  $0.028

 

Oil CME-WTI Feb. 21 Change
Apr $53.38 + $1.06
May $53.50 + $0.90
Jun $53.54 + $0.75
Jly $53.50 + $0.63
Aug $53.37 + $0.52
Sep $53.20 + $0.43

 

Equities

Equity Indexes Feb. 21 Change
Dow Industrial Average  28992.41 –   405.67
NASDAQ    9576.59 –   154.59
S&P 500   3337.75 –     42.41
Dollar (DXY)        99.34 +      0.18
February 22nd, 2020|Weekly Market Highlights|

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

Despite continued futures price pressure for most of the week, and lower negotiated cash fed cattle prices, calves and feeders mostly found increased support.

Steers and heifers sold from $1/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). Those analysts note demand was strongest for lightweight calves suited for summer grazing.

Weather lightened auction receipts again with an arctic blast and heavy rains limiting movement from southern Oklahoma through the Southeast.

“The mud has made it impossible to get trucks and trailers in and out of fields, not to mention that it has resulted in poorer cattle performance the past couple of months,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “On top of tough weather conditions, feeder Cattle futures have been languishing for three weeks towards the bottom of the trading range.”

Futures optimism increased toward the end of the week, though, as oversold conditions helped set the stage for stronger prices.

Week to week on Friday, Feeder Cattle futures closed an average of $2.61 higher (1.70 to $3.87 higher).

Looking further ahead, USDA’s Agricultural Projections to 2029 suggest calf prices this year will be slightly higher than last year and the lowest for the next decade. This year’s projected farm calf price of $160/cwt. is the lowest of the projection period, which ranges from $165.17 (2028) to $180.88 (2023).

Fed Cattle Prices Sag

Negotiated cash fed cattle trade ended the week $2-$3 lower at $119/cwt. on a live basis and $3 lower in the beef at $190.

“Most of the cattle coming off feed today are profitable, and with the dip in feeder cattle prices the past few weeks, current placements have a good chance of being profitable,” Griffith says.

Except for 50¢lower in spot Feb, Live Cattle futures closed an average of 63¢higher week to week on Friday.

The latest World Agricultural Supply and Demand Estimates (WASDE) increased projected beef production for this year 40 million lbs. more than the January estimate at 27.48 billion lb.

“The beef production forecast is raised from the previous month on higher cattle slaughter and heavier cattle weights in the first half of the year. However, the forecasts for second-half beef production is reduced on lower anticipated steer and heifer slaughter in the second half of the year,” explain USDA analysts. “This reflects a smaller number of cattle outside feedlots implied by the Jan. 1 Cattle report which results in lower placements during 2020.”

Total red meat and poultry production was projected 634 million lbs. more at 108.79 billion lbs.

The annual fed steer price (five-area direct) was projected at $117/cwt.: $123 for the first quarter; $118 for the second; $112 for the third; $114 for the fourth quarter.

In the meantime, Choice boxed beef cutout value was $2.03 lower week to week on Friday at $208.09/cwt. Select was $1.82 higher at $205.71.

“Despite the struggle of cutout prices during a time when beef demand is slack, retail prices started off the year extremely strong,” Griffith explains. “The retail price of Choice beef for January was nearly $6.06/lb., which was 20¢/lb.higher than it was in January of 2019. The all fresh retail beef price for January was nearly $5.94/lb., which was 24¢ higher.”

 

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 14 Auction Direct

Video/net

Total
 

191,800

(+5,200)

30,000

(+22,100)

5,000

(-19,900)

226,800

(+7,400)

 

CME Feeder Index

CME Feeder Index* Feb. 13 Change
  $140.60 –   $0.03

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 14 Change
600-700 lbs. $158.15 –  $0.35
700-800 lbs. $144.22 –  $2.47
800-900 lbs. $136.55 –  $1.44

 

South Central

Steers-Cash Feb. 14 Change
500-600 lbs. $167.52 + $4.31
600-700 lbs. $150.35 + $0.65
700-800 lbs. $139.93 + $0.42

 

Southeast

Steers-Cash Feb. 14 Change
400-500 lbs. $160.74 + $4.16
500-600 lbs. $147.69 + $1.26
600-700 lbs. $135.15 + $0.31

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 14 ($/cwt) Change
Choice $208.09 –  $2.03
Select $205.71 + $1.82
Ch-Se Spread $2.38 –  $3.85

 

Futures

Feeder Cattle  Feb. 14 Change
Mar $138.525 + $3.325
Apr $141.375 + $3.875
May $143.200 + $3.625
Aug $150.200 + $2.325
Sep $151.500 + $2.025
Oct $152.350 + $2.000
Nov $152.550 + $1.700
Jan ’21 $149.325 + $2.025

 

Live Cattle   Feb. 14 Change
Feb ’20 $120.825 –  $0.500
Apr $120.325 + $0.525
Jun $112.000 + $0.725
Aug $110.475 + $0.600
Oct $113.650 + $0.550
Dec $118.100 + $0.500
Feb ’21 $120.750 + $0.525
Apr $122.175 + $0.825
Jun $115.050 + $0.800

 

Corn  Feb. 14 Change
Mar ’20 $3.776 –  $0.058
May $3.820 –  $0.064
Jul $3.854 –  $0.068
Sep $3.842 –  $0.052
Dec $3.886 –  $0.054
Mar ’21 $3.980 –  $0.046

 

Oil CME-WTI Feb. 14 Change
Mar $52.05 + $1.73
Apr $52.32 + $1.77
May $52.60 + $1.78
Jun $52.79 + $1.75
Jly $52.87 + $1.65
Aug $52.85 + $1.54

 

Equities

Equity Indexes Feb. 14 Change
Dow Industrial Average  29398.08 + 295.57
NASDAQ   9731.18 +  210.67
S&P 500   3380.16 +    52.45
Dollar (DXY)        99.16 +     0.44
February 16th, 2020|Weekly Market Highlights|

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

Despite volatile outside markets and what appeared to be overall softer cash fed cattle prices, calves and feeders sold for mostly higher money last week.

Steers and heifers traded mainly steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS). The exception was $1-$3 lower in the Southeast.

“Demand was evident this week in the Dakotas on lighter-weight calves suitable for summer grazing (under 600 lbs.),” according to AMS analysts. “Heavier-weight cattle that will go directly to the feedyard are still in demand, just not at the handsome prices seen at the beginning of January.”

AMS analysts note that winter weather continues to impact the market with dicey travel conditions and impacts on feedlot performance. 

The AMS reporter on hand for Thursday’s Superior Livestock video auction pointed out feedyards remain relatively full, while winter weather and muddy pen conditions are depressing gains.

“Cost of gains are increasing as the winter has taken its toll on pen conditions in several areas this winter,” say AMS analysts. “The extra mud takes energy away from weight gain; steer carcass weights declined to 901 lbs. for week ending Jan. 25, which was 6 lbs. lower than the previous week and 13 lbs. heavier than a year ago.” 

Throw in volatile outside markets, tied to fears over how novel coronavirus could slow global economic growth and Cattle futures took a rollercoaster ride.

Week to week on Friday, Feeder Cattle futures closed from an average of 51¢lower to an average of 87¢higher.

AMS analysts note Feb-May Feeder Cattle contracts declined $11.63 to $12.55 since Jan. 13. 

With all of that said, it appears the lowest prices of the cattle cycle are in the rearview mirror (see below).

Fed Cattle Prices Soften

Negotiated cash fed cattle trade was yet to fully develop through Friday afternoon but was shaping up lower. Live prices in the Southern Plains were $1 lower than the previous week at $121/cwt. Although too few to trend, early live sales in Nebraska were also $1 lower at $121, while early dressed sales were $1-$2 lower at $193-$195.

Except for 5¢to 30¢lower toward the front of the board, Live Cattle futures closed an average of 48¢higher week to week on Friday.

Since January 13, the front five Live Cattle contracts declined $6.10 to $8.50, according to AMS analysts.

“Despite a softer Live Cattle futures market than just a few weeks ago, the expectation remains for finished cattle to reach as high as $130 in the spring months,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “There is no good reason for the market to be experiencing weakness from a fundamental standpoint. There have not been any real surprises in market information as it relates to cattle supply and expected beef production, nor has there been any negative information on the demand side.”

Wholesale beef values declined with seasonal pressure and wonderments about global economic growth.

Choice boxed beef cutout value was $2.88 lower week to week on Friday at $212.12/cwt. Select was $6.77 lower at $203.89.

U.S. Beef Exports Should Regain Momentum

U.S. beef exports last year totaled 1.32 million metric tons (mt), 2.5% below the previous year’s record volume, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef export value was 3% less at  $8.1 billion. Beef export value per head of fed slaughter last year was $309.75, down 4%.

USMEF attributes part of the decline to decreased exports to Japan, borne by the tariff disadvantage of the U.S., compared to its competitors. U.S. beef exports to Japan were 6% less in both volume (311,146 mt) and value ($1.95 billion). Recent ratification of a new trade agreement by the Japanese Parliament should offer some relief. As of Jan. 1, the tariff rate declined from 38.5% to 26.6%, the same as other major competitors, according to USMEF. There will be another rate cut April 1.

At the same time, U.S. pork exports posted new volume and value records in 2019, 10% more than the previous year in volume (2.67 million mt) and 9% higher in value ($6.95 billion).

Cattle Prices Set to Strengthen

At the 2020 Industry Outlook in San Antonio last week, CattleFax analysts explained beef demand is strong and with U.S. cattle numbers plateauing, prices are likely to be stronger in the year ahead as consumers at home and abroad support industry profitability.

CattleFax forecasts steer calf prices (550 lbs.) this year $6 higher than last year at an average of $170/cwt., across a range of $155-$180.

CattleFax also projects feeder steer prices (750 lbs.), $6 higher, at an average of $150/cwt., across a range of $140-$160.

Kevin Good, CattleFax Vice President of Industry Relations and Analysis explained, “With strong demand for U.S. beef at home and rising demand overseas, the modest increases in supply will be more than offset by a growing consumer appetite for our product.”

CattleFax projects fed steer prices to average $120/cwt. during 2020, which would $3 more than last year. He notes there is downside risk at $108 and resistance at $130.

“There is strong demand for our product, but that’s the result of the fact that our business has paid attention to market signals and we’ve been producing a consistent, quality product that has gained a greater piece of that retail dollar. We need to protect that,” says Randy Blach, CattleFax CEO.

Friday to Friday Change

Weekly Auction Receipts

 

Feb. 7 Auction Direct

Video/net

Total
 

186,600

(-66,500)

7,900

(-6,400)

24,900

(+22,400)

219,400

(-50,500)

 

CME Feeder Index

CME Feeder Index* Feb. 6 Change
  $140.63 –   $1.75

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Feb. 7 Change
600-700 lbs. $158.50 + $0.85
700-800 lbs. $146.69 + $0.35
800-900 lbs. $137.99 –  $1.94

 

South Central

Steers-Cash Feb. 7 Change
500-600 lbs. $163.21 + $2.40
600-700 lbs. $149.70 + $4.27
700-800 lbs. $139.51 –  $0.02

 

Southeast

Steers-Cash Feb. 7 Change
400-500 lbs. $156.58 –  $3.27
500-600 lbs. $146.43 –  $1.80
600-700 lbs. $134.84 –  $1.64

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Feb. 7 ($/cwt) Change
Choice $210.12 –  $2.88
Select $203.89 –  $6.77
Ch-Se Spread $6.23 + $3.89

 

Futures

Feeder Cattle  Feb. 7 Change
Mar $135.200 –  $0.875
Apr $137.500 –  $0.025
May $139.575 –  $0.125
Aug $147.875 + $1.000
Sep $149.475 + $0.875
Oct $150.350 + $0.750
Nov $150.850 + $0.875
Jan ’21 $147.300 –  $1.025

 

Live Cattle   Feb. 7 Change
Feb ’20 $121.325 –  $0.050
Apr $119.800 + $0.125
Jun $111.275 –  $0.300
Aug $109.875 –  $0.100
Oct $113.100 + $0.275
Dec $117.600 + $0.575
Feb ’21 $120.225 + $0.675
Apr $121.350 + $0.650
Jun $114.250 + $0.600

 

Corn  Feb. 7 Change
Mar ’20 $3.834 + $0.022
May $3.884 + $0.020
Jul $3.922 + $0.012
Sep $3.894 + $0.018
Dec $3.940 + $0.034
Mar ’21 $4.026 + $0.022

 

Oil CME-WTI Feb. 7 Change
Mar $50.32 –  $1.24
Apr $50.55 –  $1.13
May $50.82 –  $0.95
Jun $51.04 –  $0.76
Jly $51.22 –  $0.52
Aug $51.31 –  $0.28

 

Equities

Equity Indexes Feb. 7 Change
Dow Industrial Average  29102.51 + 576.48
NASDAQ   9250.51 +    99.57
S&P 500   3327.71 + 102.19
Dollar (DXY)        98.72 +     0.36
February 9th, 2020|Weekly Market Highlights|

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

Fears about the potential global economic impact of novel coronavirus continued to hammer equity and futures markets. Although Cattle futures firmed at the end of the week, steep losses early on helped pressure cash markets.

Nationwide, steers and heifers sold mostly $2-$5/cwt. lower, according to the Agricultural Marketing Service (AMS). There were instances of as much as $10 lower. The exception was portions of the Southeast.

Feeder Cattle futures closed an average of $3.89 lower week to week on Friday ($2.62 to $4.97 lower). That’s an average of $8.07 lower in the last two weeks.

Fed Cattle Trade Lower

Negotiated cash fed cattle trade ended the week generally $2-$3 lower on a live basis at $122/cwt. in the Southern Plains and Nebraska; $122-$123 in the western Corn Belt. Dressed sales were $3-$4 lower at $195.

“It should not be surprising for finished cattle prices to soften during January and February when beef supplies are plentiful and when beef demand is seasonally soft,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, the April Live Cattle contract is offering very little hope of a price resurgence heading into the summer grilling season. Thus, despite strong margins at the feedlot right now, many cattle feeders are already focused on the spring and summer marketing time frame. Many will have taken advantage of the previously strong futures contract price and hedged cattle, but those who did not will be looking to improve their situation.”

Live Cattle futures closed an average of $3.01 lower week to week on Friday ($1.30 to $4.62 lower). That’s an average of $5.40 lower over the last two weeks.

From Jan. 24 through Jan. 30, open interest declined by 34,260 contracts (-8.7%).

“Cattle slaughter is expected to decrease in 2020, including a slight year-over-year decline in steer and heifer slaughter and lower cow slaughter,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “However, large current feedlot inventories confirm that slaughter will be higher early in the year before decreasing in the second half of 2020. Total annual beef production is expected to be slightly higher year over year as heavier carcass weights offset lower slaughter. Beef production in the first half of the year will be higher on increased slaughter and larger carcass weights before lower slaughter pulls beef production down late in the year.”

Choice boxed beef cutout value was $1.49 lower week to week on Friday at $213.00/cwt. Select was 4¢ lower at $210.66.

“Given that red meat production is expected to remain elevated in 2020, it points to the importance of being able to export pork and beef,” Griffith says. “The relaxation of Chinese restrictions on U.S. beef and pork should improve the flow of meat to China, while the tremendous reduction in cattle numbers in Australia should also benefit U.S. beef exports. The market is not expected to move quickly, but this should support prices despite strong beef and pork production in 2020.”

President Trump also signed the U.S.-Mexico-Canada Agreement last week, which should remove some uncertainty from North American trade.

Herd Expansion Ends

Based on USDA’s Cattle report released Friday, as widely expected, national herd expansion is over.

USDA pegs the Jan. 1 inventory of all cattle and calves at 94.41 million head, which is 0.41% less (-391,400 head) than a year earlier.

Beef cows Jan. 1 were 31.31 million head, which was 1.18% less (-374,000 head) than the previous year.

Beef replacement heifers Jan 1 of 5.77 million head were 1.92% fewer (-113,000 head) than the previous year.

Milk cows Jan. 1 of 9.33 million head were 2.10% less (-113,000 head) than the same time a year earlier.

The 2019 calf crop was estimated at 36.06 million head, which was 0.70% less (-253,100 head) than in 2018

Cattle on feed Jan. 1—for all feedlots—of 14.68 million head was 2.16% more (309,800 head) than the previous year.

The estimated feeder cattle supply outside feedlots Jan. 1 of 26.45 million head is 0.40% less (-105,300 head) than a year earlier.

There were 1.61 million head grazing small grain pastures in Kansas, Oklahoma and Texas on Jan. 1. That was 15.26% less (-290,000 head) than a year earlier.

“With total cattle inventories at or just past a cyclical peak, feedlot inventories will likely peak in the next few months,” Peel says. “However, average feedlot inventories are currently record large. After peaking last August then declining for two months, the 12-month moving average of feedlot inventories moved higher the last three months and is currently at 11.639 million head, record large for the current data series back to 1996.”

Friday to Friday Change

Weekly Auction Receipts

 

Jan. 31 Auction Direct

Video/net

Total
 

253,100

(+32,500)

14,300

(-25,300)

2,500

(-34,300)

269,900

(-27,100)

 

CME Feeder Index

CME Feeder Index* Jan. 30 Change
  $142.38 –   $2.37

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 31 Change
600-700 lbs. $157.55 –  $2.59
700-800 lbs. $146.34 –  $3.08
800-900 lbs. $139.93 –  $3.66

 

South Central

Steers-Cash Jan. 31 Change
500-600 lbs. $160.81 –  $3.58
600-700 lbs. $145.43 –  $3.18
700-800 lbs. $139.53 –  $3.06

 

Southeast

Steers-Cash Jan. 31 Change
400-500 lbs. $159.85 –  $1.64
500-600 lbs. $148.23 –  $0.91
600-700 lbs. $136.48 –  $0.80

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 31 ($/cwt) Change
Choice $213.00 –  $1.49
Select $210.66 –  $0.04
Ch-Se Spread $2.34 –  $1.45

 

Futures

Feeder Cattle  Jan. 31 Change
Mar $136.075 –  $3.600
Apr $137.525 –  $4.975
May $139.700 –  $4.775
Aug $146.875 –  $4.425
Sep $148.600 –  $3.775
Oct $149.600 –  $3.075
Nov $149.975 –  $2.625
Jan ’21 $148.325 n/a

 

 

Live Cattle   Jan. 31 Change
Feb ’20 $121.375 –  $3.475
Apr $119.675 –  $4.625
Jun $111.575 –  $4.450
Aug $109.775 –  $3.850
Oct $112.825 –  $3.325
Dec $117.025 –  $2.425
Feb ’21 $119.550 –  $1.925
Apr $120.700 –  $1.750
Jun $113.650 –  $1.300

 

Corn  Jan. 31 Change
Mar ’20 $3.812 –  $0.060
May $3.864 –  $0.062
Jul $3.910 –  $0.066
Sep $3.876 –  $0.080
Dec $3.906 –  $0.076
Mar ’21 $4.004 –  $0.072

 

Oil CME-WTI Jan. 31 Change
Mar $51.56 –  $2.63
Apr $51.68 –  $2.52
May $51.77 –  $2.35
Jun $51.80 –  $2.11
Jly $51.74 –  $1.87
Aug $51.59 –  $1.65

 

Equities

Equity Indexes Jan. 31 Change
Dow Industrial Average  28256.03 –  733.70
NASDAQ   9150.94 –  163.97
S&P 500   3225.52 –    69.95
Dollar (DXY)        97.36 –      0.52
January 25th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 17, 2020

Although overall market optimism continued last week, weather and market volatility surrounding trade issues created some price pressure for feeder cattle and calves. Nationwide, steers and heifers sold from $1/cwt. lower to $2 higher, according to the Agricultural Marketing Service (AMS).

“Colder weather conditions combined with moisture systems affected many areas of the country, constraining receipts in some areas as producers elected to wait for better conditions before bringing cattle to town,” say AMS analysts. “Feedlots in all regions remain at or near full capacity. Grazing wheat in areas of the Southern Plains remains challenging with the current conditions, which has caused many cattle to be placed in grow yard or feedlots earlier than planned.”

Feeder Cattle futures closed an average of $1.53 lower week to week on Friday, from 45¢ lower at the back to $2.45 lower toward the front.

Regionally speaking, Andrew P. Griffith, agricultural economist at the University of Tennessee says, “The mild temperatures that have been experienced in the Southeast United States may have calf prices escalating more quickly than is typical because some stocker operations may have more grass available this time of year than they normally would. The warmer than average temperatures and adequate moisture has definitely supported winter annual forage production, and producers who graze these species are definitely looking for animals to graze and manage the growth.”

In his weekly market comments, Griffith also notes increasingly strong demand for calves with less health risk.

“Based on weekly auction market price averages, 525-pound value-added steers brought $12/cwt. more than non-value-added steers,” Griffith says. “This equates to the value-added steers bringing about $60 more per head, which more than pays for the vaccines and extra labor. This does not include the additional weight a producer may have achieved from a preconditioning program.”

Fed Cattle Prices Wobble

Negotiated cash fed cattle trade through Friday afternoon was steady on a live basis in the Southern Plains and Nebraska at $124/cwt., but $1 lower in the western Corn Belt at $123-$125. Dressed sales were steady to $2 lower at $198-$200.

“Following the strong run in finished cattle prices in December and a strong start to January, fed cattle prices have stagnated the past couple of weeks,” Griffith says. “Despite the appearance that prices stalled, this should still be considered positive for cattle feeders. January and February are not known as strong beef demand months, nor are they known for having the best finished cattle prices. The upside to current prices is that beef and cattle demand are strong in the spring, which should bode well for the price of finished cattle. There remains potential for the cash market to trade over $130 at some point, but cattle feeders are more concerned with maintaining strong prices over a longer period.”

Live Cattle futures closed an average of 57¢ lower, from 25¢ lower to $1.07 lower in spot Feb.

Wholesale beef values continued to crawl up from the seasonal ebb. Choice boxed beef cutout value was $4.13 higher week to week on Friday at $214.17/cwt. Select was $6.20 higher at $212.75.

Positive Trade Deals and Lots of Questions

U.S. agriculture, including cattle and beef, scored long-sought trade victories last week with the signing of the phase-one trade deal between the U.S. and China, as well as Senate approval of the U.S.-Mexico-Canada Agreement (USMCA). Market reaction was muted to negative, though, given the lack of clarity regarding timing and potential purchase volume.

China agreed to purchase and import, on average, at least $40 billion of U.S. food, agricultural, and seafood products annually for a total of at least $80 billion over the next two years, according to a factsheet from the U.S. Trade Representative.

“It is not likely that beef will be the big winner in the trade agreement with China as it relates to direct shipments of beef to China,” Griffith explains. “The United States ships very little beef to mainland China, and it is unlikely this agreement will change that. It is most likely that pork will witness the largest increase in purchases from China, given their depleted pork supplies from African Swine Fever, while the purchase of soybeans will also be on the top of the list. Despite the expectation that direct beef trade will not escalate quickly, moving more pork should support domestic meat protein prices and thus beef prices.”

Part of the phase-one trade deal does remove key Chinese non-tariff trade barriers to U.S. beef, which could prove to be the major win. The deal eliminates the 30-month age restriction, provides acceptance of current U.S. traceability and removes the ban on U.S. beef from cattle grown with commonly used and safe-proven growth hormones.

As for the USMCA, Canada and Mexico are the first and second largest export markets for U.S. food and agricultural products, totaling more than $39.7 billion food and agricultural exports in 2018, according to USDA. Mexico and Canada account for about one-third of all U.S. red meat exports, according to the U.S. Meat Export Federation. Shipments to Mexico and Canada in 2019 totaled about 1.25 million metric tons valued at $3.8 billion.

Before ratification and signing of the latter two agreements, ERS forecast total U.S. beef exports in 2020 to increase about 6% year over year to a record 3.3 billion lbs.

Friday to Friday Change

Weekly Auction Receipts

 

Jan. 17 Auction Direct

Video/net

Total
 

281,400

(-96,100)

49,300

(-10,600)

61,700

(-32,600)

392,400

(-139,300)

 

CME Feeder Index

CME Feeder Index* Jan. 16 Change
  $145.67 –   $1.16

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 17 Change
600-700 lbs. $160.77 + $2.03
700-800 lbs. $149.77 –  $1.09
800-900 lbs. $145.81 + $1.21

 

South Central

Steers-Cash Jan. 17 Change
500-600 lbs. $164.28 + $1.36
600-700 lbs. $150.06 + $0.01
700-800 lbs. $143.76 –  $1.93

 

Southeast

Steers-Cash Jan. 17 Change
400-500 lbs. $159.36 + $2.10
500-600 lbs. $147.91 + $2.45
600-700 lbs. $137.06 + $0.82

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 17 ($/cwt) Change
Choice $214.17 + $4.13
Select $212.75 + $6.20
Ch-Se Spread $1.42 –  $2.07

 

Futures

Feeder Cattle  Jan. 17 Change
Jan ’20 $145.350 –  $2.250
Mar $145.000 –  $2.450
Apr $147.875 –  $2.175
May $149.450 –  $1.750
Aug $154.875 –  $1.425
Sep $155.950 –  $1.025
Oct $156.200 –  $0.700
Nov $156.225 –  $0.450

 

Live Cattle   Jan. 17 Change
Feb ’20 $126.350 –  $1.075
Apr $127.250 –  $0.700
Jun $119.200 –  $0.575
Aug $116.775 –  $0.500
Oct $118.900 –  $0.500
Dec $121.750 –  $0.250
Feb ’21 $123.450 –  $0.375
Apr $124.000 –  $0.450
Jun $117.125 –  $0.725

 

Corn  Jan. 17 Change
Mar ’20 $3.892 + $0.036
May $3.952 + $0.026
Jul $4.010 + $0.016
Sep $4.002 –  $0.002
Dec $4.026 -0-
Mar ’21 $4.124 -0-

 

Oil CME-WTI Jan. 17 Change
Feb $58.54 –  $0.50
Mar $58.58 –  $0.41
Apr $58.51 –  $0.34
May $58.30 –  $0.33
Jun $57.96 –  $0.36
Jly $57.54 –  $0.38

 

Equities

Equity Indexes Jan. 17 Change
Dow Industrial Average  29348.10 +  524.23
NASDAQ   9388.94 +  210.08
S&P 500   3329.62 +    64.27
Dollar (DXY)        97.64 +      0.29
January 18th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 10, 2020

Cattle markets gained ground last week, amid the first week of full trade since the holidays, helped along by stronger Cattle futures, supported by expected seasonally snugger harvest-ready cattle supplies.

“Grazing steers and heifers sold sharply higher than the previous week’s light receipts, while feeder steers and heifers sold $1/cwt. lower to $3 higher,” according to the Agricultural Marketing Service (AMS). “Load lots of long-time weaned calves were in the offering as producers were ready to get their calves marketed. Several loads of lightweight calves could be procured, from the Southern Plains to the Northern Plains.”

Feeder Cattle futures closed an average of $3.95 higher week to week on Friday.

“Calf and feeder cattle markets responded as expected with strong gains to start the year and the trend should continue moving through the next few months,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “…The greater optimism is the expectation that the summer and all months of 2020 should be stronger than those of 2019.”

Cash Fed Cattle Prices Likely Steady to Higher

Through Friday afternoon, based on USDA reports, cash fed cattle trade was yet to be fully established, but early indications were for another week of steady to higher prices.

For instance, although too few to trend, early dressed sales in Nebraska and the western Corn Belt were at $200/cwt., which was mainly steady to $2 higher than the previous week.

“Packers have watched their margins tighten the past few weeks as boxed beef prices declined and finished cattle prices escalated,” Griffith explains. “…Everyone prefers more to less when it comes to margins and packers are attempting to draw cattle prices lower to support their margins. They may have a little success in the short-run but time is not on their side, as grilling season will fast approach.”

Except for $1.65 lower in the back contact, Live Cattle futures closed an average of $1.89 higher.

Wholesale beef values finally began to turn slowly away from an apparent seasonal ebb. Choice boxed beef cutout value was $1.55 higher week to week on Friday at $210.04/cwt. Select was $1.16 higher at $206.55.

“The beef supply situation is expected to be more supportive this year, with cyclical herd expansion over and beef production peaking,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The current status of the cattle cycle will be confirmed in the Cattle inventory report to be released at the end of January. In general, cattle numbers are expected to be down slightly year over year. Beef production is expected to peak fractionally higher in 2020, with heavier carcass weights offsetting a slight decline in cattle slaughter. Carcass weights finished 2019 above year-earlier levels and will bear watching in the coming year.”

The latest monthly World Agricultural Supply and Demand Estimates (WASDE forecast 2020 beef production at 27.44 billion lbs., which would be 289 million lbs. more (+1.06%) than in 2019.

WASDE anticipates average cash fed steer prices (five-area direct) for 2020 to be $125/cwt. in the first quarter, $118 in the second, $112 in the third and $114 in the fourth. The annual average price for 2020 is projected at $117.50, which is 50¢ more than the previous month’s estimate and 72¢ more than the estimated average in 2019.

Friday to Friday Change

Weekly Auction Receipts

 

Jan. 10 Auction Direct

Video/net

Total
 

377,500

(+339,600)

59,900

(+44,500)

94,300

(+94,300)

531,700

(+478,400)

 

CME Feeder Index

CME Feeder Index* Jan. 9 Change
  $146.83 +  $1.96

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 10 Change
600-700 lbs. $158.74 + $4.08
700-800 lbs. $150.86 + $3.12
800-900 lbs. $144.60 –  $0.14

 

South Central

Steers-Cash Jan. 10 Change
500-600 lbs. $162.92 + $1.51
600-700 lbs. $150.05 –  $1.92
700-800 lbs. $145.69 –  $3.99

 

Southeast

Steers-Cash Jan. 10 Change
400-500 lbs. $157.26  n/a
500-600 lbs. $145.46  n/a
600-700 lbs. $136.24  n/a

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 10 ($/cwt) Change
Choice $210.04 + $1.55
Select $206.55 + $1.16
Ch-Se Spread $3.49 + $0.39

 

Futures

Feeder Cattle  Jan. 10 Change
Jan ’20 $147.600 + $4.250
Mar $147.450 + $4.775
Apr $150.050 + $4.525
May $151.200 + $4.175
Aug $156.300 + $3.850
Sep $156.975 + $3.525
Oct $156.900 + $3.175
Nov $156.675 + $3.300

 

Live Cattle   Jan. 10 Change
Feb ’20 $127.425 + $2.700
Apr $127.950 + $2.275
Jun $119.775 + $2.100
Aug $117.275 + $1.725
Oct $119.400 + $1.650
Dec $122.000 + $1.550
Feb ’21 $123.825 + $1.700
Apr $124.450 + $1.450
Jun $117.850 –  $1.650

 

Corn  Jan. 10 Change
Mar ’20 $3.856 –  $0.008
May $3.926 –  $0.004
Jul $3.994 + $0.002
Sep $4.004 + $0.022
Dec $4.026 + $0.020
Mar ’21 $4.124 + $0.014

 

Oil CME-WTI Jan. 10 Change
Feb $59.04 –  $4.01
Mar $58.99 –  $3.33
Apr $58.85 –  $3.63
May $58.63 –  $3.39
Jun $58.32 –  $3.14
Jly $57.92 –  $2.91

 

Equities

Equity Indexes Jan. 10 Change
Dow Industrial Average  28823.87 +  188.99
NASDAQ   9178.86 +  158.09
S&P 500   3265.35 +    30.50
Dollar (DXY)        97.35 +      0.45
January 12th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Jan. 3, 2020

Calves and feeder cattle remained lightly tested during another holiday-shortened week.

“Those that did have sales were quoting much stronger prices as order buyers and farmer feeders alike were back in the seats ready to fill orders,” said analysts with the Agricultural Marketing Service (AMS).  “Most observers described buyers’ moods as being hungry and ready to procure cattle as the holidays seemed to drag out this year.”

Except for 37¢ higher in the back contract, Feeder Cattle futures closed an average of $1.29 lower week to week on Friday (7¢ lower toward the back to $2.20 lower in spot Jan).

“Calf prices do tend to start strengthening in January, but it generally takes a couple of weeks for prices to start their strong spring ascension,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.“Typically, the price for lightweight cattle continues to increase in February and March, but this is not a recommendation to hold calves until March. This is a recommendation to hold onto the reins a little longer to see if the market is going to move in the favor of those looking to market calves in the near term.”

Fed Cattle Prices Continue Higher

Negotiated cash fed cattle trade developed fully on Friday with live sales $2 higher at $124/cwt. in the Southern Plains and Nebraska; $2-$4 higher in the western Corn Belt at $125. Dressed sales were mostly $4 higher in Nebraska at mainly $199 and $3-$4 higher in the western Corn Belt at $198-$199.

Except for 10¢ lower toward the back, Live Cattle futures closed an average of $1.09 lower (12¢ lower toward the back to $2.10 lower toward the front). 

“The market and feeding conditions are both far better than where they were a year ago. Market prices today are only a couple of dollars higher than the same week last year, but cattle coming off feed right now were purchased much cheaper than the cattle coming off this time last year,” Griffith says. “At the same time, most cattle feeders are not dealing with the same wet and sloppy feeding conditions they had last year which resulted in a higher feed cost and lighter cattle coming off feed.”

The average dressed steer weight for the week ending Dec. 21 was 904 lbs., which was the same as a week earlier but 13 lbs. heavier than the prior year, according to USDA’s latest Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 834 lbs. was 1 lb. lighter than the previous week but 8 lbs. heavier than the previous year.

Choice boxed beef cutout value was 47¢ lower week to week on Friday at $208.49/cwt. Select was 82¢ higher at $205.39.

“Retailers are beginning to pull on Select grade beef as winter rolls in and as consumers move to consumption of end cuts,” Griffith says. “The change is most evident in the narrowing of the Choice-Select spread, which generally provides an indication of relative quantity supplied and demanded for Choice and Select beef.”

As is typical, the Choice-Select spread will likely continue to narrow through February, but Griffith emphasizes Choice demand remains strong and is expected to remain strong.

Friday to Friday Change

Weekly Auction Receipts

 

Jan. 3 Auction Direct

Video/net

Total
 

37,900

(+32,600)

15,400

(-1,000)

-0-

(-0-)

53,300

(+31,600)

 

CME Feeder Index

CME Feeder Index* Jan. 2 Change
  $144.87 +  $0.26

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Jan. 3 Change
600-700 lbs. $154.66 + $0.12
700-800 lbs. $147.74 –  $1.75
800-900 lbs. $144.74 –  $3.95

 

South Central

Steers-Cash Jan. 3 Change
500-600 lbs. $161.41  n/a
600-700 lbs. $151.97  n/a
700-800 lbs. $149.68  n/a

 

Southeast

Steers-Cash Jan. 3 Change
400-500 lbs. n/a  n/a
500-600 lbs. n/a  n/a
600-700 lbs. n/a  n/a

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Jan. 3 ($/cwt) Change
Choice $208.49 –  $0.47
Select $205.39 + $0.82
Ch-Se Spread $3.10 –  $1.29

 

Futures

Feeder Cattle  Jan. 3 Change
Jan ’20 $143.350 –  $2.200
Mar $142.675 –  $2.125
Apr $145.525 –  $1.775
May $147.025 –  $1.475
Aug $152.450 –  $0.875
Sep $153.450 –  $0.500
Oct $153.725 –  $0.075
Nov $153.375 + $0.375

 

Live Cattle   Jan. 3 Change
Feb ’20 $124.725 –  $1.975
Apr $125.675 –  $2.100
Jun $117.675 –  $1.425
Aug $115.500 –  $1.150
Oct $117.750 –  $0.625
Dec $120.450 –  $0.200
Feb ’21 $122.125 –  $0.125
Apr $123.000 + $0.100
Jun $119.500 n/a

 

Corn  Jan. 3 Change
Mar ’20 $3.864 –  $0.036
May $3.930 –  $0.036
Jul $3.992 –  $0.034
Sep $3.982 –  $0.040
Dec $4.006 –  $0.028
Mar ’21 $4.110 –  $0.012

 

Oil CME-WTI Jan. 3 Change
Feb $63.05 + $1.33
Mar $62.82 + $1.29
Apr $62.48 + $1.27
May $62.02 + $1.23
Jun $61.46 + $1.18
Jly $60.83 + $1.13

 

Equities

Equity Indexes Jan. 3 Change
Dow Industrial Average  28634.88 –    10.38
NASDAQ   9020.77 +    14.15
S&P 500   3234.85 –       5.17
Dollar (DXY)        96.90 –       0.11
January 5th, 2020|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 27, 2019

There was no price trend for calves and feeder cattle last week, given the holiday and just 21,700 head trading hands via auction, direct sales and video-Internet, according to the Agricultural Marketing Service (AMS).

Recent optimism remains intact, though, given the way Cattle futures shrugged off the previous week’s Cattle on Feed report.

Feeder Cattle futures closed an average of 85¢ higher week to week on Friday.

Live Cattle futures closed an average of 92¢ higher. 

“Unseasonably warm weather was noted in several areas during the mid-week holiday, however a weekend weather system is forecasted to bring rain to the Southern Plains and large snow accumulations to areas of the Northern Plains,” say AMS analysts. 

Fed Cattle Prices Step Higher

Cattle futures received support from continued firmness in cash fed cattle prices, which gained for another week.

Negotiated cash fed cattle trade was yet to be fully developed through Friday afternoon, but early prices were higher. The Texas Cattle Feeders Association reported its members trading at $122/cwt., which was $2 higher than the previous week. Likewise, AMS reported live sales in Kansas at $122, which was $2 higher than the prior week. In Nebraska, dressed sales were mostly $3 higher at mostly $196. Although too few to trend, early dressed sales in the western Corn Belt were $3-$4 higher at $195-$196.

“Higher placements the last three months have rebuilt feedlot inventories going into 2020,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Feedlots will be a bit front loaded in the first quarter of the new year and marketings are expected strong against the April Live Cattle futures contract. Of course, weather often impacts cattle performance and the timing of feedlot production this time of year and may affect feedlot marketings through the winter.”

Wholesale beef values continued to trade along the seasonal bottom.

Choice boxed beef cutout value was 74¢ lower week to week on Friday at $208.96/cwt. Select was $3.54 higher at $204.57.

The average dressed steer carcass weight for the week ending Dec. 14 was 904 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 2 lbs. lighter than the previous week but 12 lbs. heavier than the previous year. The average dressed heifer carcass weight was 835 lbs., which was 5 lbs. lighter than the previous week but 6 lbs. heavier than a year earlier.

Friday to Friday Change*

Weekly Auction Receipts

 

Dec.27 Auction Direct

Video/net

Total
 

5,300

(-217,700)

16,400

(-29,100)

-0-

(-14,000)

21,700

(-260,800)

 

CME Feeder Index

CME Feeder Index* Dec. 26 Change
  $144.61 –   $1.68

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec. 27 Change
600-700 lbs. $154.54 –  $1.11
700-800 lbs. $149.49 + $0.71
800-900 lbs. $148.69 + $2.97

 

Prior Week South Central

Steers-Cash Dec. 20 Change
500-600 lbs. $156.87 + $6.28
600-700 lbs. $145.81 + $1.25
700-800 lbs. $146.15 + $2.43

 

Prior Week Southeast

Steers-Cash Dec. 20 Change
400-500 lbs. $150.05 + $3.48
500-600 lbs. $140.49 + $6.72
600-700 lbs. $133.19 + $0.71

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 27 ($/cwt) Change
Choice $208.96 –  $0.74
Select $204.57 + $3.54
Ch-Se Spread $4.39 –  $4.28

 

Futures

Feeder Cattle  Dec. 27 Change
Jan ’20 $145.550 + $1.275
Mar $144.800 + $0.425
Apr $147.200 + $0.700
May $148.500 + $1.025
Aug $153.325 + $1.050
Sep $153.950 + $1.350
Oct $153.800 + $0.500
Nov $153.00 + $0.500

 

Live Cattle   Dec. 27 Change
Dec $123.500 + $1.275
Feb ’20 $126.700 + $0.900
Apr $127.775 + $1.050
Jun $119.100 + $0.975
Aug $116.650 + $0.825
Oct $118.375 + $0.875
Dec $120.650 + $0.875
Feb ’21 $122.250 + $0.725
Apr $122.900 + $0.800

 

Corn  Dec. 27 Change
Mar ’20 $3.900 + $0.024
May $3.966 + $0.026
Jul $4.026 + $0.032
Sep $4.022 + $0.028
Dec $4.034 + $0.018
Mar ’21 $4.122 + $0.012

 

Oil CME-WTI Dec. 27 Change
Feb $61.72 + $1.28
Mar $61.53 + $1.28
Apr $61.21 + $1.26
May $60.79 + $1.24
Jun $60.28 + $1.21
Jly $59.70 + $1.16

 

Equities

Equity Indexes Dec. 27 Change
Dow Industrial Average  28645.26 + 190.17
NASDAQ   9006.72 +   81.66
S&P 500   324o.02 +    18.80
Dollar (DXY)        97.01 –       0.67
December 28th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 20, 2019

Cash calf and feeder cattle prices gained momentum last week as buyers took advantage of some of the last auctions of the year.

Steers and heifers sold $2-$4/cwt. higher with instances of $5-$6 higher, according to the Agricultural Marketing Service (AMS).

“Demand was good for many calves, with very good demand for all yearlings offered,” say AMS analysts. “This was the last marketing opportunity for 2019 as a majority of auction barns will be closed until after the New Year’s holiday.”

Except for 45¢ and 5¢ higher in the back two contracts, Feeder Cattle futures closed an average of $1.16 lower week to week on Friday (40¢ lower toward the back to $1.87 lower near the front).

“Feeder cattle prices have been holding fairly steady and the futures market has some optimism priced in, but much of that optimism does not come about until the summer of 2020,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The winter and spring prices on feeder cattle are likely profitable for stocker producers who got the cattle bought fairly inexpensively and were able to keep them alive, but it is doubtful that anyone will have windfall profits from the turn.”

AMS analysts note moisture is still lacking in winter wheat areas.

Feedlot Placements Up

Although higher feedlot placements were anticipated, Friday’s monthly Cattle on Feed report could apply some pressure.

November placements in feedlots with 1,000 head or more capacity were 2.09 million head, which was 4.86% more than the prior year. Heading into the report, consensus view of analysts was for an increase of 1%.

Marketings in November were on par with expectations at 1.81 million head, which was 3.00% less than the prior year.

Likewise, the on-feed inventory Dec. 1 was close to expectations at 12.03 million head, which was 2.49% more than a year earlier.

Fed Cattle Prices Move Higher

Negotiated cash fed cattle prices were generally $1 higher on a live basis last week: $120/cwt. in the Southern Plains; $120-$121 in Nebraska and the western Corn Belt. Dressed sales were $2-$4 higher at $192.

“This week’s live cattle price is the highest for finished cattle since early May, and it will provide a little momentum heading into winter and early spring,” Griffith says. “With the price of finished cattle starting to gain some steam, feedlot operators will be able to focus more of their attention on cattle health and pen conditions.”

Live Cattle futures closed an average of 66¢ lower (12¢ to $1.75 lower).

Harvest flows continue to return to normalcy after resumed operations at the Tyson plant in Kansas. According to AMS, estimated cattle slaughter for the week was 668,000 head, which was 6,000 more than the previous week and 8,000 head more than a year earlier.

After a false start a week earlier, wholesale beef values may have carved out a seasonal bottom. Choice boxed beef cutout value was $6.59 lower week to week on Friday at $209.70/cwt. Select was $3.21 lower at $201.03.

“The market is now shifting from strong demand for middle meats for the holidays to end cuts that will be slow cooked during the winter months. The part of the market that remains unknown, as it is every year, is the winter weather,” Griffith explains. “Severe weather that influences travel in densely populated areas generally slows beef consumption and movement. The hope for the beef market is that winter storms do not wreak havoc on cattle or consumers.”

Friday to Friday Change*

Weekly Auction Receipts

 

Dec.20 Auction Direct

Video/net

Total
 

223,000

(-124,200)

45,500

(+11,100)

14,000

(+12,100)

282,500

(-101,000)

 

CME Feeder Index

CME Feeder Index* Dec. 19 Change
  $146.29 +  $2.89

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec. 20 Change
600-700 lbs. $155.65 + $4.08
700-800 lbs. $148.78 + $1.25
800-900 lbs. $145.72 + $2.42

 

South Central

Steers-Cash Dec. 20 Change
500-600 lbs. $156.87 + $6.28
600-700 lbs. $145.81 + $1.25
700-800 lbs. $146.15 + $2.43

 

Southeast

Steers-Cash Dec. 20 Change
400-500 lbs. $150.05 + $3.48
500-600 lbs. $140.49 + $6.72
600-700 lbs. $133.19 + $0.71

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 20 ($/cwt) Change
Choice $209.70 –  $6.59
Select $201.03 –  $3.21
Ch-Se Spread $8.67 –  $3.38

 

Futures

Feeder Cattle  Dec. 20 Change
Jan ’20 $144.275 –  $1.400
Mar $144.375 –  $1.875
Apr $146.500 –  $1.550
May $147.475 –  $1.125
Aug $152.275 –  $0.625
Sep $152.600 –  $0.400
Oct $153.300 + $0.450
Nov $152.500 + $0.050

 

Live Cattle   Dec. 20 Change
Dec $122.225 –  $0.150
Feb ’20 $125.800 –  $1.750
Apr $126.725 –  $1.475
Jun $118.125 –  $1.300
Aug $115.825 –  $0.575
Oct $117.500 –  $0.175
Dec $119.775 –  $0.125
Feb ’21 $121.525 –  $0.250
Apr $122.100 –  $0.175

 

Corn  Dec. 20 Change
Mar ’20 $3.876 + $0.066
May $3.940 + $0.060
Jul $3.994 + $0.058
Sep $3.994 + $0.064
Dec $4.016 + $0.064
Mar ’21 $4.110 + $0.060

 

Oil CME-WTI Dec. 20 Change
Feb $60.44 + $0.46
Mar $60.25 + $0.58
Apr $59.95 + $0.69
May $59.55 + $0.75
Jun $59.07 + $0.74
Jly $58.54 + $0.71

 

Equities

Equity Indexes Dec. 20 Change
Dow Industrial Average  28455.09 + 319.71
NASDAQ   8924.96 +  190.08
S&P 500   3221.22 +   52.42
Dollar (DXY)        97.68 +     0.50
December 21st, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 13, 2019

Steers and heifers sold steady to $3/cwt. lower last week, according to the Agricultural Marketing Service (AMS).

“Demand was moderate to good in most regions as cattle feeders looked to fill orders to take advantage of the market reflected in the 2020 CME Live Cattle contracts,” said AMS analysts. “With the holidays and end of the year fast approaching, many auction barns had heavy runs as marketing opportunities will be limited after next week.”

In Tennessee, for instance, Andrew P. Griffith notes auction receipts were atypically high the last couple of weeks.

“Many producers that hold onto cattle into December generally hold them until the beginning of the next year since there is generally a bump in prices and for tax reasons,” Griffith explains, in his weekly market comments. “What makes strong receipts even more puzzling is that soft prices continue to dominate the market. Many cattle producers continue to be disappointed in calf and feeder cattle prices but continue to sell calves.” He expects resource constraints are part of the explanation.

Feeder Cattle futures closed an average of $3.06 higher week to week on Friday ($1.45 higher toward the back to $4.57 higher near the front).

Negotiated cash fed cattle trade continued to develop through Friday afternoon at no worse than steady money, according to USDA reports. Early live sales were at $119/cwt. in Nebraska and at $120 in the western Corn Belt. Early dressed sales were steady in the western Corn Belt at $188 and as much as $6 higher in Nebraska at $188-$194. Earlier in the week, live sales were steady in Kansas at $119. The Texas Cattle Feeders Association reported its members selling steers steady at $119 and heifers $1 higher at nearly $119.

Live Cattle futures closed an average of $1.94 higher week to week on Friday ($1.42 to $2.85 higher).

In the latest monthly World Agricultural Supply and Demand Estimates, USDA increased the projected average fed steer price (5-area-direct) in the fourth quarter by $3 to $115/cwt., compared to the previous month. The estimated annual average price for 2019 increased $1 to $117.

For next year, the average fed steer price is projected $2 higher at $122 in the first-quarter; $1 higher in the second quarter at $118; $1 lower in the third quarter at $112. Next year’s annual average price was estimated $1 higher at $117.

Wholesale beef values continued searching for a seasonal bottom. Choice boxed beef cutout value was $8.27 lower week to week on Friday at $216.29/cwt. Select was $3.06 lower at $204.24.

“The all fresh beef retail value registered at $5.82/lb. in November which is 4.5¢ higher than the previous month and nearly 12¢ higher than November a year ago,” Griffith says. “The Choice beef retail value for November was even more impressive as it was $6.06/lb., which represented more than a 17¢ increase from October and a 15¢ increase from one year ago. The expectation could be for retail value of beef to continue escalating given that wholesale beef prices in November were 7.7% percent higher than the previous month. Another factor that may soon influence retail beef prices is the announced deal with China that sent equity markets soaring. It is difficult to fathom that a deal with China will result in a lot of U.S. beef going to China, but it could help clear some pork and poultry stocks which would pull down some of the meat protein stocks. This is a situation that is worthy of beef cattle producers’ attention as it could provide sup-port or continue to weigh on the market.”

Friday to Friday Change*

Weekly Auction Receipts

 

Dec. 13 Auction Direct

Video/net

Total
 

347,200

(+60,300)

34,400

(+8,400)

1,900

(-54,800)

383,500

(+13,900)

 

CME Feeder Index

CME Feeder Index* Dec. 12 Change
  $143.40 –  $1.09

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec. 13 Change
600-700 lbs. $151.57 –  $0.50
700-800 lbs. $145.33 –  $1.43
800-900 lbs. $144.65 –  $1.68

 

South Central

Steers-Cash Dec. 13 Change
500-600 lbs. $150.59 –  $4.73
600-700 lbs. $144.56 –  $1.28
700-800 lbs. $143.73 + $0.06

 

Southeast

Steers-Cash Dec. 13 Change
400-500 lbs. $146.57 –  $0.58
500-600 lbs. $133.77 –  $3.59
600-700 lbs. $132.48 + $0.88

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 13 ($/cwt) Change
Choice $216.29 –  $8.27
Select $204.24 –  $3.06
Ch-Se Spread $12.05 –  $5.21

 

Futures

Feeder Cattle  Dec. 13 Change
Jan ’20 $145.675 + $4.125
Mar $146.250 + $4.575
Apr $148.050 + $4.275
May $148.600 + $3.525
Aug $152.900 + $2.825
Sep $153.000 + $2.100
Oct $152.850 + $1.450
Nov $152.450 + $1.600

 

Live Cattle   Dec. 13 Change
Dec $122.375 + $2.175
Feb ’20 $127.550 + $2.575
Apr $128.200 + $2.850
Jun $119.425 + $2.275
Aug $116.400 + $1.700
Oct $117.675 + $1.550
Dec $119.900 + $1.425
Feb ’21 $121.775 + $1.425
Apr $122.275 + $1.525

 

Corn futures Dec. 13 Change
Dec $3.662 –  $0.002
Mar ’20 $3.810 + $0.044
May $3.880 + $0.056
Jul $3.936 + $0.070
Sep $3.930 + $0.064
Dec $3.952 + $0.050

 

Oil CME-WTI Dec. 13 Change
Jan ’20 $60.07 + $0.87
Feb $59.98 + $0.88
Mar $59.67 + $0.89
Apr $59.26 + $0.89
May $58.80 + $0.88
Jun $58.33 + $0.90

 

Equities

Equity Indexes Dec. 13 Change
Dow Industrial Average  28135.88 + 120.82
NASDAQ   8734.88 +   78.35
S&P 500   3168.80 +   22.89
Dollar (DXY)        97.18 –      0.50
December 14th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Dec. 6, 2019

Stronger cash fed cattle prices helped support calf and feeder cattle prices last week, amid deeper receipts following Thanksgiving.

Compared to two weeks earlier, steers and heifers sold from $1/cwt. lower to $3 higher, according to the Agricultural Marketing Service (AMS). 

“More weaned calves with health programs behind them were seen in auctions this week and were met with higher prices, for the most part,” AMS analysts say.  “There were some individual sales that had weaker spots in them, but demand overall was rated at good to very good at most sales.”

“It would appear the calf market has put in its seasonal price low, but that does not mean there will be a sudden resurgence of prices in December,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.

Feeder Cattle futures closed an average of $1.01 lower week to week on Friday, except for 10¢ and 22¢ higher in the back two contracts.

Fed Prices Remain Solid

Negotiated cash fed cattle prices were mainly $1 higher last week, with live prices in the Southern Plains at $119/cwt. and at $118-119 in the western Corn Belt. Dressed prices were $1 higher at $188.

“There is still time for the market to hit the $120 mark for a weekly average price. Hitting this price point would provide considerable optimism for the spring market that could easily exceed $130 at some point,” Griffith says. “Most cattle feeders are in the black on closeouts, which should provide some support for the feeder cattle market in the coming months.”

Although carcass weights are creeping forward, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University notes steer carcasses are 3.3 lbs. lighter year over year (year to date) and heifer carcasses are 4.4 lbs. lighter.

Speaking to last week’s winter storms, in his weekly market comments, Peel notes, “An early storm like this may set the stage for a long period of feedlot production challenges with impacts persisting and accumulating through the winter.”

Total cattle slaughter under federal inspection was estimated at 679,000 head for the week, which would be 126,000 head more than the previous week and 10,000 head more than the same time last year, according to AMS.

“If realized, the weekly cattle slaughter is the largest since the week ending June 25, 2011,” say AMS analysts. “This is a staggering realization that so many cattle have been harvested, considering there were many more packing plants nationwide back then.”

Live Cattle futures closed an average of 73¢ lower week to week on Friday (20¢ lower toward the back to $1.22 lower toward the front).

Wholesale beef values continued their seasonal decline.

Choice boxed beef cutout value was $7.56 lower week to week on Friday at $224.56/cwt. Select was $3.04 lower at $207.30.

“The support for beef prices will come from Select beef moving through the winter months as consumers shift demand from middle meats to end cuts,” Griffith says. “Despite the pressure beef prices will be exposed to the next several months, the market is expected to remain relatively strong as demand continues to support prices.”

Friday to Friday Change*

Weekly Auction Receipts

 

Dec. 6 Auction Direct

Video/net

Total
 

286,900

(+228,300)

26,000

(+100)

56,700

(+56,600)

352,900

(+268,300)

 

CME Feeder Index

CME Feeder Index* Dec. 5 Change
  $144.49 –  $0.13

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Dec. 6 Change
600-700 lbs. $152.07 + $4.48
700-800 lbs. $146.76 + $4.67
800-900 lbs. $146.33 –  $0.05

 

South Central

Steers-Cash Dec. 6 Change
500-600 lbs. $155.32 + $3.81
600-700 lbs. $145.84 + $2.34
700-800 lbs. $143.67 –  $1.65

 

Southeast

Steers-Cash Dec. 6 Change
400-500 lbs. $147.15 + $21.55
500-600 lbs. $137.36 + $6.45
600-700 lbs. $131.60 + $7.68

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Dec. 6 ($/cwt) Change
Choice $224.56 –  $7.56
Select $207.30 –  $3.04
Ch-Se Spread $17.26 –  $4.52

 

Futures

Feeder Cattle  Dec. 6 Change
Jan ’20 $141.550 –  $0.725
Mar $141.675 –  $1.350
Apr $143.775 –  $1.200
May $145.075 –  $1.075
Aug $150.075 –  $0.950
Sep $150.900 –  $0.750
Oct $151.400 + $0.100
Nov $150.850 + $0.225

 

Live Cattle   Dec. 6 Change
Dec $120.200 –  $1.000
Feb ’20 $124.975 –  $1.225
Apr $125.350 –  $1.025
Jun $117.150 –  $0.575
Aug $114.700 –  $0.650
Oct $116.125 –  $0.600
Dec $118.475 –  $0.625
Feb ’21 $120.350 –  $0.200
Apr $120.750 –  $0.650

 

Corn futures Dec. 6 Change
Dec $3.664 –  $0.048
Mar ’20 $3.766 –  $0.046
May $3.824 –  $0.032
Jul $3.866 –  $0.036
Sep $3.866 –  $0.014
Dec $3.902 –  $0.008

 

Oil CME-WTI Dec. 6 Change
Jan ’20 $59.20 + $4.03
Feb $59.10 + $3.96
Mar $58.78 + $3.80
Apr $58.37 + $3.63
May $57.92 + $3.47
Jun $57.43 + $3.33

 

Equities

Equity Indexes Dec. 6 Change
Dow Industrial Average  28015.06 –  36.35
NASDAQ   8656.63 –    8.94
S&P 500   3145.91 +    4.93
Dollar (DXY)        97.68 –     0.59
December 14th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 29, 2019

Although trends were tougher to come by during the holiday-shortened week, those available suggest optimism. Tyson’s plan to resume operations at its Kansas plant also adds support heading into the new week.

There were just 84,600 head of calves and feeder cattle offered at auction, direct and via video or Internet sales, according to the Agricultural Marketing Service (AMS), so no nationwide trend.

Feeder Cattle futures surged higher, though, basically erasing losses from the previous week. They closed an average of $3.79 higher week to week on Friday. Turned out, traders viewed the 2% fewer October placements (Cattle on Feed report) as positive. Ongoing gains in cash fed cattle prices also provided support.

Negotiated cash fed cattle trade for the week was mainly $2-$3 higher on a live basis at $118/cwt. in Kansas, $118-$120 in Nebraska and $117-$118 in the western Corn Belt. Dressed trade was $3 higher at $187.

Other than unchanged in spot Dec, Live Cattle futures closed an average of $2.36 higher week to week on Friday.

“Annual average feedlot inventories (12-month moving average) peaked in August but there is a chance that strong placements in the next few months could push to a higher average total,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In other words, feedlot inventories are close but may not yet be quite at a cyclical peak.”

Choice boxed beef cutout value was 45¢ lower week to week on Friday at $232.12/cwt. Select was 98¢ lower at $210.34.

The average dressed steer weight for cattle harvested the week ending Nov. 16 was 912 lbs., according to USDA’s weekly Actual Slaughter Under Federal Inspection report. That was 4 lbs. heavier than the previous week and 12 lbs. heavier than the previous year. The average dressed heifer weight of 841 lbs. was 2 lbs. heavier than the prior week and 5 lbs. heavier than the previous year.

“Large supplies of red meat are prevalent in the marketplace, as total weekly meat production and weekly hog slaughter set new records for week ending Nov. 16,” say AMS analysts.

Friday to Friday Change*

Weekly Auction Receipts

 

Nov. 29 Auction Direct

Video/net

Total
 

58,600

(-265,300)

25,900

(-14,800)

100

(-20,900)

84,600

(-301,000)

 

CME Feeder Index

CME Feeder Index* Nov. 28 Change
  $145.11 –  $0.36

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

Week ending Nov. 22

North Central

Steers-Cash Nov. 22 Change
600-700 lbs. $150.37 –  $1.71
700-800 lbs. $147.78 –  $2.30
800-900 lbs. $146.44 –  $3.45

Week ending Nov. 22

South Central

Steers-Cash Nov. 22 Change
500-600 lbs. $151.38 –  $1.89
600-700 lbs. $144.41 –  $2.14
700-800 lbs. $144.62 –  $2.49

Week ending Nov. 22

Southeast

Steers-Cash Nov. 22 Change
400-500 lbs. $144.30 –  $0.30
500-600 lbs. $135.22 –  $0.36
600-700 lbs. $131.04 + $0.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 29 ($/cwt) Change
Choice $232.12 –  $0.45
Select $210.34 –  $0.98
Ch-Se Spread $21.78 + $0.53

 

Futures

Feeder Cattle  Nov. 29 Change
Jan ’20 $142.275 + $3.000
Mar $143.025 + $3.425
Apr $144.975 + $3.875
May $146.150 + $4.125
Aug $151.025 + $4.125
Sep $151.650 + $4.150
Oct $151.300 + $4.175
Nov $150.625 + $3.475

 

Live Cattle   Nov. 29 Change
Dec $118.675      -0-
Feb ’20 $126.200 +$2.350
Apr $126.375 +$2.200
Jun $117.725 +$2.400
Aug $115.350 +$2.325
Oct $116.725 +$2.375
Dec $119.100 +$2.650
Feb ’21 $120.550 +$2.300
Apr $121.400 +$2.300

 

Corn futures Nov. 29 Change
Dec $3.712 +$0.026
Mar ’20 $3.812 +$0.028
May $3.856 +$0.020
Jul $3.902 +$0.016
Sep $3.880 – $0.004
Dec $3.910 – $0.014

 

Oil CME-WTI Nov. 29 Change
Jan ’20 $55.17 –  $2.60
Feb $55.14 –  $2.52
Mar $54.98 –  $2.37
Apr $54.74 –  $2.24
May $54.45 –  $2.12
Jun $54.10 –  $2.02

 

Equities

Equity Indexes Nov. 29 Change
Dow Industrial Average  28051.41 +175.79
NASDAQ   8665.47 +145.59
S&P 500   3140.98 +  29.99
Dollar (DXY)        98.27      -0-
November 30th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 22, 2019

Wobbly Feeder Cattle futures and the sheer number of calves crossing the auction block ahead of Thanksgiving helped pressure calf and feeder cattle prices last week, despite renewed farmer-feeder interest in the north.

Nationwide, steers and heifers traded steady to $3 lower, according to the Agricultural Marketing Service (AMS). Those analysts point out weaned calves with good condition continue to sell at premium to un-weaned, fleshy peers.

Feeder Cattle futures closed an average $4.08 lower week to week on Friday. Most of that came Friday, amid pessimism ahead of the monthly Cattle on Feed report.

As widely expected, feedlot placements in October were significantly higher—up 10.19% more (+299,000 head) compared to last year at 2.48 million head. That was still 2% less than consensus projections ahead of the report. It’s also worth keeping in mind that placements the previous October were slacker due to early calf marketing borne by regional drought.

Feedlot marketings in October of 1.88 million head were 0.64% less (-12,000 head), which was in line with expectations.

As of Nov. 1, there were 11.83 million head on feed, which was 1.19% more (+139,000 head) than the previous year.

Fed Cattle Prices Grind Higher

Negotiated cash fed cattle trade last week was mainly $1 higher on a live basis at $116/cwt. in the Southern Plains and at $115-$117 up north. Dressed trade was $2 higher at $184.

Tyson Fresh Meats—the beef and pork subsidiary of Tyson Foods, Inc.—announced Monday that efforts to resume harvest operations at its Holcombe, KS beef plant will begin the first week of December, with intentions to be fully operational by the first week of January. It plans to resume receiving cattle at the facility the first week of December.

After 42¢ lower in spot Dec, Live Cattle futures closed an average of $1.67 lower week to week on Friday.

Choice boxed beef cutout value was $8.23 lower week to week on Friday at $232.57/cwt. Select was $3.01 lower at $211.32.

“The largest portion of holiday beef buying is coming to an end just prior to the Thanksgiving holiday. The market will likely decline further with the short week of trading next week,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “However, there is likely to be some frenzied beef buying in the weeks leading up to Christmas, as some will realize they are short bought and need a little more inventory to meet consumers’ demand. Thus, beef cutout prices will be well supported through the end of the year. With the change in the calendar year, cutout prices are expected to soften as beef demand seasonally softens during the winter months and as consumers focus more on end meats instead of middle meats.”

Beef price support from U.S. beef exports is a wild card heading into 2020, but appears poised to strengthen, due in part to the global animal protein deficit cleaved by African Swine Fever.

“While beef exports (U.S.) are likely to end 2019 with an almost 2% decline, shipments are expected to rebound in 2020 by about 7%, as drought in competitor Australia reduces its exportable supply at the same time as beef demand continues to expand in Asia,” say analysts with USDA’s Economic Research Service (ERS), in the November Livestock, Dairy and Poultry Outlook.

In the meantime, Griffith explains slaughter cow and bull prices are churning against typical seasonal pressure as 90% lean beef prices continue to soar.

“Cow slaughter, which is the primary source of 90% lean manufacturing beef, in 2019, is about 163,000 head higher than the same time period in 2018. One would think that increased production would result in lower prices, but there are more factors at play,” Griffith explains. “Australia is generally the largest import source of such beef to the United States, but high prices on Australian beef have tempered imports of lean manufacturing beef. Australia is sending considerable quantities of manufacturing beef to China, which is searching for meat protein to make up for the decline in pork production. This same situation has bolstered fresh 50% lean beef, which is sourced from trimmings of finished cattle. This has added some value to finished cattle, which should make its way down the production line.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 22

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

323,900

(+24,900)

40,700

(-10,500)

21,000

(+17,000)

385,600

(+31,400)

 

CME Feeder Index

CME Feeder Index* Nov. 21 Change
  $145.47 –  $1.65

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 22 Change
600-700 lbs. $150.37 –  $1.71
700-800 lbs. $147.78 –  $2.30
800-900 lbs. $146.44 –  $3.45

 

South Central

Steers-Cash Nov. 22 Change
500-600 lbs. $151.38 –  $1.89
600-700 lbs. $144.41 –  $2.14
700-800 lbs. $144.62 –  $2.49

 

Southeast

Steers-Cash Nov. 22 Change
400-500 lbs. $144.30 –  $0.30
500-600 lbs. $135.22 –  $0.36
600-700 lbs. $131.04 + $0.08

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 22 ($/cwt) Change
Choice $232.57 –  $8.23
Select $211.32 –  $3.01
Ch-Se Spread $21.25 –  $5.22

 

Futures

Feeder Cattle  Nov. 22 Change
Jan ’20 $139.275 –  $5.000
Mar $139.600 –  $4.625
Apr $141.100 –  $4.350
May $142.025 –  $4.050
Aug $146.900 –  $3.575
Sep $147.500 –  $3.350
Oct $147.125 –  $3.600
Nov $147.150 n/a

 

Live Cattle   Nov. 22 Change
Dec $118.675 – $0.425
Feb ’20 $123.850 – $1.125
Apr $124.175 – $1.900
Jun $115.325 – $2.275
Aug $113.025 – $2.075
Oct $114.350 – $1.600
Dec $116.450 – $1.575
Feb ’21 $118.250 – $1.425
Apr $119.100 – $1.425

 

Corn futures Nov. 22 Change
Dec $3.686 – $0.026
Mar ’20 $3.784 – $0.022
May $3.836 – $0.028
Jul $3.886 – $0.038
Sep $3.884 – $0.026
Dec $3.924 – $0.032

 

Oil CME-WTI Nov. 22 Change
Jan ’20 $57.77 –  $0.06
Feb $57.66 –  $0.03
Mar $57.35 –  $0.02
Apr $56.98 -0-
May $56.57 -0-
Jun $56.12 –  $0.01

 

Equities

Equity Indexes Nov. 22 Change
Dow Industrial Average  27875.62 – 128.87
NASDAQ   8519.88 –   20.95
S&P 500   3110.93 –      9.53
Dollar (DXY)        98.27 +      0.27
November 24th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 15, 2019

Firm negotiated cash fed cattle trade and wholesale beef values continued to help bolster calf and feeder cattle prices last week, while futures prices softened slightly.

Steers and heifer sold steady to $3/cwt. higher, according to the Agricultural Marketing Service (AMS).

“Auction receipts were somewhat tempered this week with early-week sales dealing with severely cold temperatures and frozen precipitation making travel hazardous from Missouri up through the Northern Plains and into the Upper Midwest,” say AMS analysts. “Most buyers at auctions were order buyers, as the true farmer-feeder is still in the combine trying to get the late crop out before adverse weather stops them. With large sales of calves across the nation, buyers are spread out and some sales felt the effects of light buyer attendance.”

Feeder Cattle futures closed an average $1.30 lower week to week on Friday. That included a mid-week average decline of $3.13.

“The sharp losses in the Feeder Cattle contracts found fund managers rolling to the January contract and beyond,” explain AMS analysts.

Rather than the beginning of a correction, one could argue retrenchment ahead of what looks to be a higher trending market.

Andrew P. Griffith, agricultural economist at the University of Tennessee suggests producers with spring-born calves left to sell may be rewarded if they wait a little longer.

“There is a good chance the price increase from today until the middle of January will exceed any negative tax implications,” Griffith says, in his weekly market comments. “For stocker producers, continue buying cattle at low prices because the payout in four or five months looks advantageous.”

Cash Fed Cattle Maintain Recent Gains

Negotiated cash fed cattle trade ended the week mainly steady to $1 higher at $115/cwt. on a live basis and at $182 in the beef, based on USDA reports.

According to AMS, cattle slaughter under federal inspection last week was estimated at 657,000, which would be 6,000 more than the previous week and 9,000 more than a year earlier.

Live Cattle futures closed an average of 51¢ lower week to week on Friday (2¢ to 90¢ lower).

Choice boxed beef cutout value was $1.68 higher week to week on Friday at $240.80/cwt. Select was $1.07 higher at $214.33.

During a Tuesday conference call to share the company’s fourth-quarter fiscal results, Noel White, Tyson CEO said the company expects to have its southwest Kansas plant—shuttered by the Aug. 9 fire—fully operational within 60 days, and potentially sooner.

“There is a good possibility that some portion of finished cattle will trade as high as $120 before the end of the year if the current trend holds, which will further support prices within the cattle complex,” Griffith says. “The support for finished cattle prices may be stemming from the thought that there are not as many cattle out in the country as was first thought. If this is truly the case, then finished cattle prices will be well supported in the spring with a target price exceeding $130.”

Wonderments about the number of cattle relative to previous estimates have to do with cattle slaughter.

Through Nov. 2, total cattle slaughter was a little more than 1% more than the same period last year, according to AMS.

“Heifer slaughter is over 7% greater than a year ago, while steer slaughter is nearly 3% below a year ago. Year-to-date cow slaughter is nearly 3% higher than a year ago, as well,” explain AMS analysts. “With these data points brought to the forefront, there is no doubt that the cattle herd has got to be contracting at this point. High costs of production in the cow-calf sector have got to be a factor in this pullback. Also, cow-calf producers nationwide are getting older. Some have the winter of 2018-2019 fresh in their minds and are not wanting to take on Old Man Winter again. There have already been auctions advertising herd liquidations in the Plains states before the end of the year.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 15

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

299,000

(-61,400)

51,200

(+1,600)

4,000

(-19,900)

354,200

(-79,700)

 

CME Feeder Index

CME Feeder Index* Nov. 14 Change
  $147.12 +  $1.28

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 15 Change
600-700 lbs. $152.08 + $1.65
700-800 lbs. $150.08 + $0.96
800-900 lbs. $149.89 + $2.17

 

South Central

Steers-Cash Nov. 15 Change
500-600 lbs. $153.27 + $0.80
600-700 lbs. $146.55 + $0.34
700-800 lbs. $147.11 + $1.16

 

Southeast

Steers-Cash Nov. 15 Change
400-500 lbs. $144.60 + $0.19
500-600 lbs. $135.58 –  $0.48
600-700 lbs. $130.96 –  $0.15

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 15 ($/cwt) Change
Choice $240.80 + $1.69
Select $214.33 + $1.07
Ch-Se Spread $26.47 + $0.61

 

Futures

Feeder Cattle  Nov. 15 Change
Nov $146.250 –  $0.750
Jan ’20 $144.275 –  $1.600
Mar $144.225 –  $1.275
Apr $145.450 –  $1.375
May $146.075 –  $1.275
Aug $150.475 –  $1.375
Sep $150.850 –  $1.375
Oct $150.725 –  $1.350

 

Live Cattle   Nov. 15 Change
Dec $119.100 – $0.150
Feb ’20 $124.975 – $0.050
Apr $126.075 – $0.025
Jun $117.600 – $0.675
Aug $115.100 – $0.675
Oct $115.950 – $0.900
Dec $118.025 – $0.700
Feb ’21 $119.675 – $0.750
Apr $120.525 – $0.700

 

Corn futures Nov. 15 Change
Dec $3.712 – $0.060
Mar ’20 $3.806 – $0.058
May $3.864 – $0.070
Jul $3.924 – $0.072
Sep $3.910 – $0.052
Dec $3.956 – $0.054

 

Oil CME-WTI Nov. 15 Change
Dec $57.72 + $0.48
Jan ’20 $57.83 + $057
Feb $57.69 + $0.59
Mar $57.37 + $0.60
Apr $56.98 + $0.58
May $56.57 + $0.58

 

Equities

Equity Indexes Nov. 15 Change
Dow Industrial Average  28004.98 + 323.25
NASDAQ   8540.83 +    65.52
S&P 500   3120.46 +     27.38
Dollar (DXY)        98.00 –        0.40
November 17th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 8, 2019

Cash calf and feeder cattle prices mostly held their own or churned higher last week, as receipts increased and more farmer feeder were able to enter the market.

Steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). That was with the second heaviest auction volume of the year at 360,400 head.

Other than $2.12 and 12¢ lower in the front two contracts, Feeder Cattle futures closed an average 36¢ higher week to week on Friday.

“Discounts continue to be applied to calves with short or no weaning programs, but they are not nearly as severe as what was being applied a month ago,” say AMS analysts. “Colder weather is helping to straighten calves out and making them a little less risky to own.”

As well, late harvest, weather, and truck availability continue to be issues in various parts of the country.

“Demand for lightweight calves in Montana was reduced by dry conditions on the West Coast,” explain AMS analysts. “Transportation issues in the Northern Plains tightened demand late in the week, due to limited truck availability. It’s farming time in the Northern Plains and farmers need those trucks hooked to their grain trailers. Farmer feeders are still working on corn harvest in the Northern Plains, which is going slow as corn is wet and must be dried. This is keeping some of these buyers out of the market on calves, as they simply don’t have the time to take on a bawling calf.” They add that propane rationing in the Upper Midwest and Eastern Corn Belt, could further delay harvest completion.

With all of that said, Andrew P. Griffith, agricultural economist at the University of Tennessee notes in his weekly market comments that value of gain is currently offering opportunity to add weight to calves.

“With the assumption of buying 425-575 lb. steers in November and carrying those calves for 150 days ,with an average daily gain of 2 lbs./day, the expected value of gain ranges from $1.42 to $1.54/lb., Griffith explains, in his weekly market comments. “There is no guarantee in the stated value of gain if no form of price risk management is used. Thus, to increase the probability of successfully reaching the stated value of gain, one would have to sell a futures contract or do something similar to successfully capture this value. There is a strong potential for profit in what the market is currently offering, but this profit potential will change as the market changes, which means producers can either speculate that the market will stay the same or go higher or they can hedge their bets and capture the value being offered today.”

Cash fed cattle prices grind higher

Negotiated cash fed cattle trade ended the week at $114-$115/cwt. in the Southern Plains, which was mainly $2 higher in Kansas and $2-$3 higher in the Texas Panhandle. In Nebraska, live trade was unevenly steady at $114-$116. Prices in the western Corn Belt were $1-$2 higher at $114-$115. Dressed trade was $1-$2 higher at $181-$182.

Other than 27¢ lower in spot Dec and unchanged in away Dec, Live Cattle futures closed an average of 62¢ higher week to week on Friday.

“The finished cattle market is trading $14 higher than its fall low, on a live basis, which occurred eight weeks ago,” Griffith says. “Live cattle futures are pricing in further gains before the end of the year, which could mean a 20% price improvement from the fall lows. Beyond the end of the year, and pushing into the spring of 2020, Live Cattle futures are predicting finished cattle to reach $126/cwt. The current expectation for April is about $3 lower than the highest single week average in the spring of 2019, which may be disappointing to some. However, there is a good possibility of live cattle experiencing a single weekly average in 2020 that meets or exceeds $130.”

AMS analysts point out increasing boxed beef values and strong packer margins continue to support fed cattle prices, while providing incentive for packers to keep running plants hard.

Choice boxed beef cutout value was $5.92 higher week to week on Friday at $239.12/cwt. Select was $5.75 higher at $213.26.

Beef Exports Remain Strong

U.S. beef exports in September were steady with last year in volume at 109,799 metric tons (mt), but value was 4% less at $661.3 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Through the first three quarters of the year, beef exports were 2% below last year’s record pace in both volume (991,325 mt) and value ($6.1 billion).

“While red meat exports face obstacles in some key markets, global demand dynamics are strong and we see opportunities for significant growth in the fourth quarter and into 2020,” says USMEF President and CEO Dan Halstrom. “Progress is being made on market access improvements and this makes for a very positive outlook going forward.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 8

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

360,400

(+85,800)

49,600

(+600)

23,900

(+21,900)

433,900

(+108,300)

 

CME Feeder Index

CME Feeder Index* Nov. 7 Change
  $145.84 –   $0.14

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 8 Change
600-700 lbs. $150.43 –  $1.42
700-800 lbs. $149.12 –  $0.97
800-900 lbs. $147.72 –  $2.35

 

South Central

Steers-Cash Nov. 8 Change
500-600 lbs. $152.47 + $3.06
600-700 lbs. $146.21 + $3.48
700-800 lbs. $145.95 + $1.49

 

Southeast

Steers-Cash Nov. 8 Change
400-500 lbs. $144.41 + $5.46
500-600 lbs. $136.06 + $3.74
600-700 lbs. $131.11 + $1.73

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 8 ($/cwt) Change
Choice $239.12 + $5.92
Select $213.26 + $5.75
Ch-Se Spread $25.86 + $0.17

 

Futures

Feeder Cattle  Nov. 8 Change
Nov $147.000 –  $2.125
Jan ’20 $145.875 –  $0.125
Mar $145.500 + $0.375
Apr $146.825 + $0.425
May $147.350 + $0.175
Aug $151.850 + $0.150
Sep $152.225 + $0.275
Oct $152.075 + $0.750

 

Live Cattle   Nov. 8 Change
Dec $119.250 – $0.275
Feb ’20 $125.025 +$0.800
Apr $126.100 +$0.650
Jun $118.275 +$0.525
Aug $115.775 +$0.475
Oct $116.850 +$0.575
Dec $118.725 -0-
Feb ’21 $120.425 +$0.350
Apr $121.225 +$0.950

 

Corn futures Nov. 8 Change
Dec $3.772 – $0.120
Mar ’20 $3.864 – $0.120
May $3.934 – $0.110
Jul $3.996 – $0.104
Sep $3.962 – $0.062
Dec $4.010 – $0.046

 

Oil CME-WTI Nov. 8 Change
Dec $57.24 + $1.04
Jan ’20 $57.26 + $0.99
Feb $57.10 + $0.95
Mar $56.77 + $0.91
Apr $56.40 + $0.56
May $55.99 + $0.79

 

Equities

Equity Indexes Nov. 8 Change
Dow Industrial Average  27681.24 + 333.88
NASDAQ   8475.31 +    88.91
S&P 500   3093.08 +     26.17
Dollar (DXY)        98.40 +       1.28
November 10th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Nov. 1, 2019

Stronger futures prices helped push cash calf and feeder cattle prices mainly steady to higher.

Yearling steers and heifers sold steady to $3 higher, while calves traded steady to $2 higher, according to the Agricultural Marketing Service (AMS).

“Long-time weaned calves with full rounds of preconditioning vaccinations sold on good demand, creating wide price spreads compared to calves with partial vaccinations,” according to AMS analysts. Between unseasonably cold temperatures and wintry weather in various parts of the country, they note that auction receipts were lighter than normal for the fall run.

Feeder Cattle futures closed an average of $4.22 higher week to week on Friday. The CME Feeder Cattle Index was $1.25 higher week to week on Thursday at $145.98, the highest since April.

“Cattle ready to go on feed have been rejuvenated by stronger live cattle futures, which have spurred feeder cattle futures,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The November feeder cattle contract price has increased more than $8/cwt. since the first day of October, which has resulted in a very similar increase in load-lot cattle being marketed through Tennessee auctions.”

Fed Cattle Prices Gain

Negotiated cash fed cattle trade remained undeveloped in the North through Friday afternoon, based on USDA reports. Although there were too few transactions to trend, a few live sales in the western Corn Belt were at $112-$114/cwt. and a few dressed sales in Nebraska were at $180. Compared to the previous week, that was $2-$4 higher on a live basis and $5 higher in the beef.

Live Cattle futures closed an average of $2.66 higher week to week on Friday.

Griffith points out the December Live Cattle contract is $19 higher than its low Sept. 9.

“Futures prices have live cattle moving higher before the end of the year, with further gains heading into late winter and early spring,” Griffith explains. “The market is beginning to take off, but it is difficult to determine what all is driving this uptick. With little information to support surging prices, now is the time to take advantage of hedging opportunities, especially with the strong premium in futures compared to cash.”

Wholesale beef values continue to sell higher year over year. Choice boxed beef cutout value was $7.76 higher week to week on Friday at $233.20/cwt. Select was $7.67 higher at $207.51.

Choice boxed beef cutout value was $233.20/cwt. Friday, the highest since August—about a week after the Tyson fire. That was $14.65 more (+6.7%) than a year earlier. At $207.52 on Friday, Select was $3.27 more (+1.6%) more. The Choice-Select spread was 79.6% higher (+$11.39) at $25.69.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Nov. 1

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

274,600

(-15,600)

49,000

(+15,300)

2,000

(-30,700)

325,600

(-31,000)

 

CME Feeder Index

CME Feeder Index* Oct. 31 Change
  $145.98 +  $1.25

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Nov. 1 Change
600-700 lbs. $151.85 + $1.81
700-800 lbs. $150.09 + $2.11
800-900 lbs. $150.07 + $3.28

 

South Central

Steers-Cash Nov. 1 Change
500-600 lbs. $149.41 + $1.29
600-700 lbs. $147.23 + $3.00
700-800 lbs. $144.46 –  $0.34

 

Southeast

Steers-Cash Nov. 1 Change
400-500 lbs. $138.95 –  $0.63
500-600 lbs. $132.32 –  $1.35
600-700 lbs. $129.38 + $0.40

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Nov. 1 ($/cwt) Change
Choice $233.20 + $7.76
Select $207.51 + $7.67
Ch-Se Spread $25.69 + $0.09

 

Futures

Feeder Cattle  Nov. 1 Change
Nov $149.125 + $3.750
Jan ’20 $146.000 + $4.400
Mar $145.125 + $4.375
Apr $146.400 + $4.150
May $147.175 + $3.675
Aug $151.700 + $4.175
Sep $151.950 + $5.050
Oct $148.600 n/a

 

Live Cattle   Nov. 1 Change
Dec $119.525 +$3.450
Feb ’20 $124.225 +$3.150
Apr $125.450 +$2.850
Jun $117.750 +$2.875
Aug $115.300 +$2.525
Oct $116.275 +$2.250
Dec $118.725 +$2.200
Feb ’21 $120.075 +$2.000
Apr $120.275 n/a

 

Corn futures Nov. 1 Change
Dec $3.892 +$0.026
Mar ’20 $3.984 +$0.010
May $4.044 +$0.004
Jul $4.100 +$0.004
Sep $4.024 – $0.010
Dec $4.056 – $0.020

 

Oil CME-WTI Nov. 1 Change
Dec $56.20 –  $0.46
Jan ’20 $56.27 –  $0.44
Feb $56.15 –  $0.44
Mar $55.86 –  $0.46
Apr $55.54 –  $0.41
May $55.20 –  $0.35

 

Equities

Equity Indexes Nov. 1 Change
Dow Industrial Average  27346.36 + 389.30
NASDAQ   8386.40 + 143.28
S&P 500    3066.91 +   44.36
Dollar (DXY)        97.12 –      0.71
November 3rd, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 25, 2019

Buyer demand remained strong for yearlings, while colder than normal temperatures in some areas of the county, along with snow and wet conditions, limited demand for un-weaned calves, according to the Agricultural Marketing Service (AMS).

“Potential health risks have kept most buyers at bay for calves. However, preconditioned long-time weaned calves did attract much more of the buyer’s attention, creating wide price spreads,” say AMS analysts. “Moreover, with harvest now in full swing, some farmer feeders are focusing on getting crops out rather than placing calves. With most feedlots at or near full capacity throughout most feeding regions, placing cattle has become challenging as empty pens are already spoken for or getting much needed maintenance work completed.”

Overall, AMS pegged the price trend for yearling steers and heifers at $3/cwt. lower to $1 higher. Steer and heifer calves sold $1-$3 lower.

“Prices for freshly weaned calves may suffer the next several weeks if the total number of head being marketed remains elevated,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The large swings in temperature this time of year result in high-risk cattle if they have not been weaned and vaccinated. The increased risk of morbidity and mortality force cattle buyers to lower their bids to account for the additional veterinary cost and death loss.”

Feeder Cattle futures closed $2.16 higher week to week on Friday, supported by increasing strength in cash fed cattle prices and Live Cattle futures.

Fed Cattle Prices Firm to Higher

Except for the Southern Plains, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports. Live sales in the Southern Plains on Thursday were at $110/cwt., which was $1 higher in Kansas and $2 higher in the Texas Panhandle.

“Negotiated cash fed trade in the Southern Plains provided a psychological victory for cattle feeders with the bulk of sales reported at $110, the highest since the early-August plant fire,” say AMS analysts. “The trend of pursuing high-grading cattle continued throughout all feeding regions with higher live prices reported as the week progressed.”

Live Cattle futures closed an average of $1.70 higher week to week on Friday ($1.40 to $2.45 higher).

“The finished cattle market is attempting to break through price resistance at $110. If there is any follow through next week then it is likely the fed cattle market will officially be out of its fall slump and heading toward better days,” Griffith says. “Live Cattle futures for October traded over $111 on Friday while the December contract traded over $115. The December contract will become the nearby contract next week, which means the market may see some jockeying in the December contract to close some of the $4 gap that currently exists. The better news is the February Live Cattle contract which is trading over $120.”

Seasonally increasing wholesale beef values continued to provide underlying support. Choice boxed beef cutout value was $7.40 higher week to week on Friday at $225.44/cwt. Select was $6.80 higher at $199.84. Over the last two weeks, Choice is up $9.88 and Select is $11.16 higher.

Griffith notes beef cow slaughter is 2.3% more than last year for January through September at 2.30 million head.

“It is difficult to say if these slaughter levels will actually result in reduced beef cowherd size when the Jan. 1 inventory report is released, but these slaughter levels have supported beef production in 2019,” Griffith says. “Despite strong beef production, prices continue to find support due to domestic demand and international demand. This will only be further supported if a deal with China is established.”

Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out African Swine Fever (AFS) in China is projected to reduce total global beef, pork and poultry production 1.5% this year, compared to 2018 and another 2.4% next year.

“At the same time, global meat exports are expected to increase 6.9% in 2019 compared to 2018 and to grow another 6.1% in 2020,” Peel explains, in his weekly market comments. “As a result, global meat exports are projected to expand from 11.2% of total production to 13.2% in just two years. ASF is not controlled in most countries where it is currently active; it is difficult to eradicate and restocking is usually unsuccessful if the disease is not completely controlled. The rebuilding of the global pork industry is not a matter of months but will take years. It is clear that ASF will have very significant impacts on global protein markets for the foreseeable future.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 25

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

290,200

(+16,200)

33,700

(-10,300)

32,700

(+30,600)

356,600

(+36,500)

 

CME Feeder Index

CME Feeder Index* Oct. 24 Change
  $144.73 –   $0.87

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 25 Change
600-700 lbs. $150.04 –  $1.41
700-800 lbs. $147.98 –  $1.35
800-900 lbs. $146.79 –  $0.05

 

South Central

Steers-Cash Oct. 25 Change
500-600 lbs. $148.12 –  $1.06
600-700 lbs. $144.23 –  $2.36
700-800 lbs. $144.80 –  $2.90

 

Southeast

Steers-Cash Oct. 25 Change
400-500 lbs. $139.58 –  $0.67
500-600 lbs. $133.67 + $0.69
600-700 lbs. $128.98 –  $2.22

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 25 ($/cwt) Change
Choice $225.44 + $7.40
Select $199.84 + $6.80
Ch-Se Spread $25.60 + $0.60

 

Futures

Feeder Cattle  Oct. 25 Change
Oct $145.700 + $2.200
Nov $145.375 + $2.525
Jan ’20 $141.600 + $2.150
Mar $140.750 + $1.900
Apr $142.250 + $1.925
May $143.500 + $2.350
Aug $147.525 + $2.025
Sep $146.900 + $2.200

 

Live Cattle   Oct. 25 Change
Oct $111.975 +$1.500
Dec $116.075 +$2.450
Feb ’20 $121.075 +$2.000
Apr $122.600 +$1.675
Jun $114.875 +$1.425
Aug $112.775 +$1.375
Oct $114.025 +$1.400
Dec $116.525 +$1.825
Feb ’21 $118.075 +$1.625

 

Corn futures Oct. 25 Change
Dec $3.866 – $0.044
Mar ’20 $3.974 – $0.052
May $4.040 – $0.054
Jul $4.096 – $0.056
Sep $4.034 – $0.030
Dec $4.076 – $0.026

 

Oil CME-WTI Oct. 25 Change
Dec $56.66 + $2.79
Jan ’20 $56.71 + $2.89
Feb $56.59 + $2.97
Mar $56.32 + $2.95
Apr $55.95 + $2.87
May $55.55 + $2.75

 

Equities

Equity Indexes Oct. 25 Change
Dow Industrial Average  26958.06 + 187.25
NASDAQ   8243.12 + 153.58
S&P 500    3022.55 +   36.38
Dollar (DXY)        97.83 +     0.69
October 27th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 18, 2019

Drier conditions and recently higher cash prices fostered increased calf and feeder cattle trade in some areas last week. In other areas, continued wet conditions limited receipts and demand.

Yearling steers and heifers sold steady to $4/cwt. higher, according to the Agricultural Marketing Service (AMS). Calves traded from $3 lower to $4 higher.

“There was very good demand for yearlings as the supply coming off grass tightens and the cash fed cattle market moves higher,” say AMS analysts. “Bawling calves seem to be finding the most variable demand, very dependent on how much or little health risk buyers view each lot as having…Discounts for those calves without shots or legitimate weaning programs are severe.”

Week to week on Friday, Feeder Cattle closed $1.01 lower through the front three contracts and then 30¢ lower to 37¢ cents higher across the rest of the board.

Although calf prices bucked the seasonal trend in some parts of the country, Andrew P. Griffith, agricultural economist at the University of Tennessee cautions that increased support likely lies at least six weeks into the future. If temperatures and precipitation cooperate, he says calf prices this spring could be 2-3% higher than last year.

Based on USDA reports, negotiated cash fed cattle trade through Friday afternoon was looking most steady to mixed. Live prices in the Southern Plains were steady to $1 lower at $108/cwt. Dressed trade in the North was $1-$3 higher at mostly $173 in the western Corn Belt and at $173-$175 in Nebraska.

Live Cattle futures closed an average of 71¢ higher week to week on Friday (27¢ higher to $1.47 higher in spot Oct).

There was an explosion at Cargill’s Dodge City packing facility this week, in a room adjacent to the main facility. Cattle harvest stopped for the remainder of the week but is expected to be back to full speed by early this week.

Wholesale beef values continued to rebound seasonally. Choice boxed beef cutout value was $2.48 higher week to week on Friday at $218.04/cwt. Select was $4.36 higher at $193.04.

“The domestic supply of meat is extremely strong and all indications are that it will continue to grow. It seems like a stretch to think that the increased production can be absorbed by the domestic market and maintain price levels, much less strengthen prices,” Griffith says, in his weekly market comments. “U.S. red meat and poultry consumption for 2019 is estimated at 220.4 lbs. per person, which is about 2.5 lbs. higher than 2018, with 2018 consumption being the highest since 2007. The estimate for 2020 meat and poultry consumption is 3.1 lbs. higher than 2019. These consumption numbers do not represent demand, but how much meat must be consumed domestically based on production. These estimates are saying the export market is vital to support farm level prices.”

USDA forecasts more U.S. beef exports next year, compared to this year’s strong pace.

“Total exports (beef) in 2020 are forecast up 6% to a record 3.3 billion lbs., accounting for 12% of U.S. production,” say Analysts with USDA’s Economic Research Service (ERS), in the latest Livestock, Dairy and Poultry Outlook. “The United States is poised to expand market share in top markets such as Japan, South Korea, and Taiwan as key competitor Australia struggles to maintain its market shares, given its reduced exportable supplies and its dominance in filling China demand.”

At the same time, ERS expects the U.S. to import less beef in 2020.

“U.S. imports will likely be limited by a combination of tighter supplies in Oceania and expected increased demand for beef in Asia due to African Swine Fever,” say ERS analysts.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 18

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

274,000

(+55,500)

44,000

(+25,400)

2,100

(-31,100)

320,100

(+20,300)

 

CME Feeder Index

CME Feeder Index* Oct. 17 Change
  $145.60 +  $0.97

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 18 Change
600-700 lbs. $151.45 + $0.15
700-800 lbs. $149.33 + $1.31
800-900 lbs. $146.84 + $0.37

 

South Central

Steers-Cash Oct. 18 Change
500-600 lbs. $149.18 + $0.90
600-700 lbs. $146.59 + $0.74
700-800 lbs. $147.70 + $2.08

 

Southeast

Steers-Cash Oct. 18 Change
400-500 lbs. $140.25 + $0.23
500-600 lbs. $132.98 + $1.13
600-700 lbs. $131.20 + $3.43

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 18 ($/cwt) Change
Choice $218.04 + $2.48
Select $193.04 + $4.36
Ch-Se Spread $25.00 –  $1.98

 

Futures

Feeder Cattle  Oct. 18 Change
Oct $143.500 –  $0.600
Nov $142.850 –  $1.400
Jan ’20 $139.450 –  $1.025
Mar $138.850 –  $0.300
Apr $140.325 –  $0.025
May $141.150 + $0.100
Aug $145.700 + $0.375
Sep $144.700 –  $0.075

 

Live Cattle   Oct. 18 Change
Oct $110.475 +$1.025
Dec $113.625 +$1.475
Feb ’20 $119.075 +$1.025
Apr $120.925 +$0.725
Jun $113.450 +$0.325
Aug $111.400 +$0.275
Oct $112.625 +$0.300
Dec $114.700 +$0.475
Feb ’21 $116.450 +$0.775

 

Corn futures Oct. 18 Change
Dec $3.910 – $0.066
Mar ’20 $4.026 – $0.050
May $4.094 – $0.032
Jul $4.152 – $0.012
Sep $4.064 – $0.012
Dec $4.102 – $0.002

 

Oil CME-WTI Oct. 18 Change
Nov $53.78 –  $0.92
Dec $53.87 –  $0.91
Jan ’20 $53.82 –  $0.90
Feb $53.62 –  $0.92
Mar $53.37 –  $0.97
Apr $53.08 –  $1.02

 

Equities

Equity Indexes Oct. 18 Change
Dow Industrial Average  26770.81 –     45.78
NASDAQ   8089.54 +    32.50
S&P 500    2986.17 +    15.90
Dollar (DXY)        97.14 –        1.19
October 20th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Oct. 11, 2019

While discounts are increasing for un-weaned calves, demand continues strong for the dwindling supply of yearlings, according to the Agricultural Marketing Service (AMS).

“As the cash fed cattle market works its way higher and the supply of yearlings gets tighter, buyers are willing to chase the feeder market,” explained the AMS reporter on hand for Monday’s weekly auction at Sioux Falls Regional in South Dakota, where yearlings traded steady with instances of $2 higher.

Nationwide, AMS pegged the trend for cash calves and feeders at $3/cwt. lower to $2 higher, with calves in the Northern Plains trading for as much as $8 lower.

“The Southeast started to move more calves this week, compared to recent weeks and the demand would be considered moderate to good,” say AMS analysts. “Demand for feeders is good for those calves weaned at least 45 days and preferably for 60 days, along with a couple of rounds of shots.”

Although auction receipts increased week to week, winter weather in the Northern Plains and muddy feedlot conditions continued to limit demand. This year’s extended wet weather also appears to be weighing on weaning weights in some areas.

“In Nebraska, most sellers pick a week and sell their livestock at about the same time every year. The bulk of the calves and some yearlings are a few pounds lighter than last year,” AMS analysts explain. “Most pasture grass grew rapidly all summer and never hardened up. A lot of producers complained about washy grass and it has affected the weaning weight on a lot of calves.”

Feeder Cattle futures grew more optimistic, closing an average of $1.91 higher week to week on Friday (80¢to $2.87 higher). That was thanks to a mid-week surge that was difficult to explain.

Stronger futures also came in the face of Corn futures that were an average of 11¢ higher through the front four contracts week to week. Traders took Corn down hard Thursday, with bearish estimates in the World Agricultural Supply and Demand Estimates. They rebounded Friday with reports that the U.S. and China reached agreement to a phased approach to its trade standoff, which will suspend added tariffs, for now at least.

Carcass Weights Suggest Market Currentness

Except for some early sales in the North, negotiated cash fed cattle trade remained undeveloped through Friday afternoon, based on USDA reports.

Early dressed sales in Nebraska were $2 higher than the previous week at $172/cwt. Early dressed sales also were trading for $172 in the western Corn Belt, but too few to trend. Live sales in the western Corn Belt were steady to $2 higher than the previous week at $109. Live sales were at $109-$110 in Nebraska, but too few to trend.

Through Thursday, the average five-area direct fed steer price was $3.36 higher week to week at $109.08/cwt. on a live basis. The average dressed steer price was $3.44 higher at $170.08.

Live Cattle futures continued to extend recent gains, closing an average of $1.24 higher week to week on Friday (95¢higher to $2.10 higher in spot Oct).

Earlier in the week, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University explained market impacts from the Tyson plant fire have mostly dissipated.

“Limited packing capacity will likely continue to restrict fed cattle prices somewhat, but it appears the industry has thus far avoided even worse implications of a serious backlog of fed cattle and a pronounced lack of ability to process cattle in a timely fashion,” Peel explained, in his weekly market comments.

Wholesale beef values also appear to have found a seasonal bottom.

Choice boxed beef cutout value was $3.70 higher week to week on Friday at $215.66/cwt. Select was $1.76 higher at $188.68.

Moreover, Andrew P. Griffith, agricultural economist at the University of Tennessee says retail beef prices are demand neutral. In his weekly market comments, he explains the all fresh beef retail price last month was $5.78/lb., which was 7¢less than the prior month and 5¢higher than the same time a year earlier.

“Total meat production is something to keep an eye on while trade deals are hashed out,” Griffith says. “It will take some strong trade deals and China importing a lot of meat protein from any country to help support prices and clear the market.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

# head

Oct. 11

Auction 

(change)

Direct 

(change)

Video/Net 

(change)

Total 

(change)

 

218,500

(+28,800)

48,100

(-12,500)

33,200

(+28,900)

299,800

(+42,200)

 

CME Feeder Index

CME Feeder Index* Oct. 10 Change
  $144.65 +  $1.05

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Oct. 11 Change
600-700 lbs. $151.30 –  $1.06
700-800 lbs. $148.02 –  $4.18
800-900 lbs. $146.47 –  $0.51

 

South Central

Steers-Cash Oct. 11 Change
500-600 lbs. $148.28 –  $1.02
600-700 lbs. $145.85 –  $1.16
700-800 lbs. $145.62 –  $0.45

 

Southeast

Steers-Cash Oct. 11 Change
400-500 lbs. $140.02 + $0.95
500-600 lbs. $131.85 + $1.56
600-700 lbs. $127.77 + $1.49

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Oct. 11 ($/cwt) Change
Choice $215.66 + $3.70
Select $188.68 + $1.76
Ch-Se Spread $26.98 + $1.94

 

Futures

Feeder Cattle  Oct. 11 Change
Oct $144.100 + $3.675
Nov $144.250 + $3.650
Jan ’20 $140.475 + $3.500
Mar $139.150 + $3.000
Apr $140.350 + $3.000
May $141.050 + $2.550
Aug $145.125 + $3.775
Sep $144.475 + $0.975

 

Live Cattle   Oct. 11 Change
Oct $109.450 +$2.100
Dec $112.150 +$1.375
Feb ’20 $118.050 +$4.700
Apr $120.200 +$1.425
Jun $113.125 +$0.975
Aug $111.125 +$0.950
Oct $112.325 +$1.025
Dec $114.225 +$1.175
Feb ’21 $115.675 +$1.150

 

Corn futures Oct. 11 Change
Dec $3.976 +$0.130
Mar ’20 $4.076 +$0.106
May $4.126 +$0.102
Jul $4.164 +$0.108
Sep $4.076 +$0.072
Dec $4.100 +$0.058

 

Oil CME-WTI Oct. 11 Change
Nov $54.70 + $1.89
Dec $54.78 + $2.04
Jan ’20 $54.72 + $2.16
Feb $54.54 + $2.21
Mar $54.34 + $2.27
Apr $54.10 + $2.34

 

Equities

Equity Indexes Oct. 11 Change
Dow Industrial Average  26816.59 + 242.87
NASDAQ   8057.04 +    74.57
S&P 500    2970.27 +    18.16
Dollar (DXY)        98.33 –      0.51
October 20th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 13, 2019

Cattle futures rallied after potentially finding the lows on Monday, but cash calf and feeder cattle prices continued under pressure most of the week.

Steers and heifers sold mostly $2-$6/cwt. lower, with calves as much as $10 lower, according to the Agricultural Marketing Service (AMS).

Week to week on Friday, Feeder Cattle futures closed an average of $3.29 higher ($2.55 to $3.77 higher).

“The most pressing issue from a marketing standpoint comes from the expectation that calf prices will continue to soften from now through November,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Producers are already taking a hit on the chin with relatively low calf prices…the market is poor and there is no near term improvement in sight with the fall marketing rush around the corner.”

In his neck of the woods, where dryness is spreading, Griffith noted some producers are compounding the situation by using available forage to hold calves longer in hopes of market improvement.

“The available marketing alternatives become fewer the longer a person waits to make a decision,” Griffith says. “Not only do alternatives become fewer, but the check often gets smaller.”

Fed Cattle Prices Sag

Fed cattle prices continued to grind lower on lighter week-to-week trade through late Friday afternoon.

Week to week through Thursday afternoon, on lighter trade, the Five Area direct average steer price was $2.82 lower at $99.49/cwt. on a live basis. The average dressed steer price was $6.69 lower at $159.50.

Through Friday afternoon, USDA reported negotiated prices in the Texas Panhandle $1 lower at $99. 

Live Cattle futures rallied, though, helped along by surging Lean Hog futures. Week to week on Friday, they were an average of $3.91 higher ($3.45 to $4.70 higher).

Plentiful supplies and the continued bottleneck resulting from less harvest capacity, resulting from the Tyson plant fire, continue to cap fed cattle price potential.

So far, it appears that positive fed cattle basis continues to encourage timely fed cattle marketing, maintaining currentness. However, Griffith explains that could change, given the incentive of further-out futures premiums.

“Cattle feeders have been willing sellers of fat cattle most of the year, but the market is beginning to send signals that may derail the marketing schedule and result in heavier cattle being marketed,” Griffith says. “The deferred contract months are trading at a premium compared to the October contract, which provides cattle feeders an incentive to feed cattle longer. The December Live Cattle contract has a $6/cwt. premium priced in compared to October while the February contract has more than a $12 premium. These types of premiums may result in feedlot managers deciding to keep cattle on feed two to three weeks longer in hopes of capturing higher prices. This decision will also result in more beef hitting the market.”

At the same time, besides seasonal pressure, wholesale beef prices continue downward, adjusting to fundamental price levels before the Tyson fire.

Choice boxed beef cutout value was $6.43 lower week to week on Friday at $220.88/cwt. Select was $3.34 lower at $198.60.

“Prices are closing in on $20 lower than their weekly peak but remain $5 higher than where they were prior to the fire,” Griffith explains. “It is likely boxed beef prices will continue to moderate as fall approaches since the market is typically soft compared to the summer. The next round of support for beef prices will be the holiday season, but holiday price support is a few months down the road.”

Chinese purchases of U.S. pork last week, if continued, could provide some support.

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Sep. 13

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

176,400

(+69,600)

73,500

(+15,400)

122,000

(+107,300)

371,900

(+192,300)

 

CME Feeder Index

CME Feeder Index* Sept. 12 Change
  $136.09 –  $2.27

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 13 Change
600-700 lbs. $147.21 –  $8.08
700-800 lbs. $143.06 –  $4.09
800-900 lbs. $135.35 –  $5.10

 

South Central

Steers-Cash Sept. 13 Change
500-600 lbs. $142.74 –  $5.35
600-700 lbs. $141.30 –  $3.48
700-800 lbs. $137.73 –  $2.01

 

Southeast

Steers-Cash Sept. 13 Change
400-500 lbs. $139.62 –  $5.15
500-600 lbs. $132.09 –  $5.47
600-700 lbs. $126.86 –  $5.12

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 13 ($/cwt) Change
Choice $220.88 –  $6.43
Select $198.60 –  $3.34
Ch-Se Spread $22.28 –  $3.09

 

Futures

Feeder Cattle  Sept. 13 Change
Sep $136.500 + $3.150
Oct $134.575 + $3.675
Nov $134.025 + $3.650
Jan ’20 $131.975 + $3.500
Mar $131.400 + $3.000
Apr $132.625 + $3.000
May $132.975 + $2.550
Aug $135.975 + $3.775

 

Live Cattle   Sept. 13 Change
Oct $98.075 +$3.200
Dec $104.375 +$4.625
Feb ’20 $111.100 +$4.700
Apr $115.050 +$4.200
Jun $107.950 +$3.675
Aug $106.250 +$3.850
Oct $107.950 +$3.500
Dec $110.800 +$3.950
Feb ’21 $112.300 +$3.450

 

Corn futures Sept. 13 Change
Sep $3.554 +$0.130
Dec $3.686 +$0.132
Mar ’20 $3.814 +$0.128
May $3.904 +$0.130
Jul $3.970 +$0.124
Sep $4.006 +$0.106

 

Oil CME-WTI Sept. 13 Change
Oct $54.85 –  $1.67
Nov $54.80 –  $1.63
Dec $54.59 –  $1.58
Jan ’20 $54.27 –  $1.55
Feb $53.94 –  $1.52
Mar $53.61 –  $1.49

 

Equities

Equity Indexes Sept. 13 Change
Dow Industrial Average  27219.52 + 422.06
NASDAQ     8176.71 +    73.64
S&P 500     3007.39 +    28.68
Dollar (DXY)          97.86 –      0.53
September 15th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Sept. 6, 2019

Sliding cash fed cattle prices cast a pall over markets, especially later in the week.

Overall, feeders and calves traded $3/cwt. lower to $2 higher, according to the Agricultural Marketing Service (AMS), with the most strength in the North Central region.

Thanks to a surge early in the week, Feeder Cattle futures closed an average of 58¢higher across a broad range (5¢to $1.05 higher), except for 2¢lower in Jan.

“The market price movement from the middle of April to the beginning of September has been a violent ride from a futures standpoint,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “A quick glance at the September contract shows a decline from $162/cwt. at the peak to below $134 recently. The cash prices have not seen as violent of a movement, but they have not benefited from this type of action.”

Between extending grazing opportunities and lousy prices, auction receipts continue lighter year over year. Year to date, auction, direct and video receipts counted by the National Feeder and Stocker Cattle Summary are 4.4% less than the same time last year, according to AMS.

“Feeder cattle producers have been hesitant to offer yearlings for sale as they would like to see a higher market, but with an abundance of grass, the need to pull cattle off and ship them to town has diminished,” say AMS analysts. “Feedlot backgrounders are just as hesitant to sell cattle but are also very concerned of where the market could go if the Live Cattle futures contracts go lower yet.”

Cash Fed Cattle Prices Continue Lower

Live sales ended up $3 lower in the Southern Plains last week at $100/cwt., $4-$6 lower in Nebraska at mostly $100 and $2-$5 lower in the western Corn Belt at $102-$107. Dressed sales were $9-$10 lower in Nebraska at $160-$166; $7-$9 lower in the western Corn Belt at $163-$166.

Week to week on Friday, Live Cattle futures closed an average of $3.53 lower through the front three contracts and then and average of 46¢lower.

“The weak Live Cattle futures complex is hanging heavy on cattle feeders’ minds as they want to buy yearlings and get them placed on feed, but breakeven prices are much higher than current futures prices,” say AMS analysts. “Outgoing fed cattle continue to lose money and the outlook going forward is very murky, leaving cattle feeders very unsure of what they should do.”

Choice boxed beef cutout value was $4.46 lower week to week on Friday at $227.31/cwt. Select was $10.33 lower at $201.94.

“Boxed beef prices have spent the last couple of weeks retreating from their post-Tyson fire high,” Griffith explains. “The two weeks following the fire, the Choice cutout value escalated nearly $34 to just shy of $240/cwt. This was an unexpected price boom for packers who generally have to fight the market in late summer and fall. However, they continue to benefit from the sudden price escalation as prices this week remain a good $12 higher than where they were prior to the fire.”

Friday to Friday Change*

Weekly Auction Receipts

Receipts

Sep. 6

Auction (head)

(change)

Direct

(head)

(change)

Video-Net (head)

(change)

Total

(head)

(change)

 

106,800

(-43,600)

58,100

(-500)

14,700

(-197,100)

179,600

(-241,200)

 

CME Feeder Index

CME Feeder Index* Sept. 5 Change
  $138.36 –  0.19

*Thursday-to Thursday for CME Feeder Index

 

Cash Stocker and Feeder

North Central

Steers-Cash Sept. 6 Change
600-700 lbs. $155.29 + $1.37
700-800 lbs. $147.15 + $0.57
800-900 lbs. $140.45 –  $1.75

 

South Central

Steers-Cash Sept. 6 Change
500-600 lbs. $148.09 –  $2.26
600-700 lbs. $144.78 –  $1.34
700-800 lbs. $139.74 –  $1.97

 

Southeast

Steers-Cash Sept. 6 Change
400-500 lbs. $144.77 –  $1.12
500-600 lbs. $137.56 –  $1.23
600-700 lbs. $131.98 –  $2.03

(AMS National Weekly Feeder & Stocker Cattle Summary)

 

Wholesale Beef Value

Boxed Beef  (p.m.) Sept. 6 ($/cwt) Change
Choice $227.31 –  $4.46
Select $201.94 –  $10.33
Ch-Se Spread $25.37 + $5.87

 

Futures

Feeder Cattle  Sept. 6 Change
Sep $133.350 + $0.950
Oct $130.900 + $0.100
Nov $130.375 + $0.050
Jan ’20 $128.475 –  $0.025
Mar $128.400 + $0.350
Apr $129.625 + $0.700
May $130.425 + $0.850
Aug $132.200 + $1.050

 

Live Cattle   Sept. 6 Change
Oct $94.875 – $4.050
Dec $99.750 – $3.925
Feb ’20 $106.400 – $2.625
Apr $110.850 – $0.325
Jun $104.275 – $0.125
Aug $102.400 – $0.075
Oct $104.450 – $0.225
Dec $106.850 – $1.550

 

Corn futures Sept. 6 Change
Sep $3.424 – $0.156
Dec $3.554 – $0.142
Mar ’20 $3.686 – $0.136
May $3.774 – $0.126
Jul $3.846 – $0.124
Sep $3.900 – $0.092

 

Oil CME-WTI Sept. 6 Change
Oct $56.52 + $1.42
Nov $56.43 + $1.54
Dec $56.17 + $1.61
Jan ’20 $55.82 + $1.66
Feb $55.46 + $1.68
Mar $55.10 + $1.67

 

Equities

Equity Indexes Sept. 6 Change
Dow Industrial Average  26796.46 + 394.18
NASDAQ     8103.07 + 140.19
S&P 500     2978.71 +   52.25
Dollar (DXY)          98.01 –      0.80
September 8th, 2019|Weekly Market Highlights|

Cattle Current Weekly Highlights—Week ending Aug. 30, 2019

Cattle markets started the week with some bounce from news about the U.S. trade deal with Japan and a neutral to friendly monthly Cattle on Feed report. However, Cattle futures faltered as the week wore on, with wholesale beef values adjusting lower toward pre-fire levels and with holiday beef buying in the rearview mirror.

Steer and heifer calves sold mostly steady to $5/cwt. higher, while yearlings traded steady to $3 lower, according to the Agricultural Marketing Service (AMS). 

“With the CME cattle board displaying a gloomy outlook the last quarter, demand for big yearlings off grass was good at the few locations that had several load lots on hand,” say AMS analysts. 

At the same time, sellers are less than eager to accept current prices. For instance at Superior’s Big Horn Classic video auction the previous week, with 208,800 head on offer, the AMS reporter noted some consignors moved cattle to the next sale or passed on the bids.

“Given the lower placement numbers for July, based on the August Cattle on Feed report, one could probably surmise that there are several feeder cattle that will be coming to market in September and October,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “If corn prices remain relatively low and beef demand remains steady, then yearling type cattle prices should remain steady the next several weeks before succumbing to a downtrend.”

Feeder Cattle futures closed an average of $1.91 lower week to week on Friday (87¢ lower in spot Sep to $2.40 lower).

Although a sense of normalcy is returning, there’s still plenty of uncertainty remaining after the Aug. 9 fire that temporarily shuttered the Tyson plan at Holcombe, KS.

“While the impacts of the Tyson plant fire will likely diminish relatively quickly in the next few weeks, feeder cattle markets are still nervous and defensive about the corn market situation, increasingly shaky macroeconomic conditions and continued global economic turmoil,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “The uncertainty and volatility impacting feeder cattle markets is likely to continue this fall and winter. This increases the risks of winter stocker production but may also present short term opportunities for either buying or selling cattle or both,” Peel says. “The best advice at this point is to evaluate and reevaluate possibilities frequently and remain as nimble as possible both offensively and defensively.”

Cash Fed Cattle Prices Sink

Negotiated cash fed cattle prices lost ground as the week progressed. They ended up $3/cwt. lower in the Southern Plains last week at $103/cwt. Live trades were $2-$3 lower in Nebraska at $104-$106 and steady to $5 lower in the western Corn Belt at $105-$110. Dressed sales in Nebraska were $6-$10 lower at $165-$172; $3-$7 lower in the western Corn Belt at mostly $171.

“The market is down one large harvest facility,” Griffith says. “Cattle feeders cannot feed the same animal for infinity and beyond. Availability of feeder cattle will increase in the near term. All of this information results in packers continuing to put the squeeze on cattle feeders as they appear to be holding all of the leverage. It is difficult to identify any leverage point cattle feeders control in today’s market, but this situation will not last forever.”

Except for 37¢ higher in expiring Aug and 45¢ higher in the back contract, Live Cattle futures closed an average of 57¢ lower week to week on Friday.

Although feedlot marketing remained aggressive last month, the estimated supply of cattle on feed more than 120 days was 0.7% more than the previous year, according to Brenda Boetel, a livestock economist at the University of Wisconsin-River Falls.

“Total cattle on feed inventory saw the largest July-to-August decline since 2008,” Boetel explains in the most recent In the Cattle Markets. “Although cattle are currently being marketed in a timely manner, there is danger that this pace will slow and currentness will slip. Given the decrease in slaughter capacity due to the Tyson fire, Saturday slaughter will need to continue to keep the market current. Keeping up with the increased supply in the fourth quarter will be a challenge.”

Choice b