The Cattle Range Market Trendlines:
Another week of price erosion for most of the cattle/beef market factors. As the 60 Day Trendline shows, the market is nearly exactly where it was 2 months ago and illustrates the trading range that has been has been in place this fall. A lower market next week will establish a 60 day low.
10 Day Market Trendline
Change from Previous Day: -0.22%
Change from 10 Days Ago: -6.87%
Change from 60 Days Ago: +0.13%
60 Day Market Trendline
The Trendlines are indicators of overall cattle/beef market strength and are based on daily market factors. Each daily factor is the aggregate weighted total of the Gain/(Loss) for 12 market indicators compared to the previous trading day.
Weekly Market Overview:
National Feeder & Stocker Cattle Weekly Summary:
RECEIPTS: Auctions Direct Video/Internet Total
This Week 334,300 18,200 1,900 354,400
Last Week 257,400 28,500 20,200 306,100
Last Year 325,500 43,100 27,200 395,800
Compared to last week, steer and heifers traded mostly steady to 4.00 lower, with a few auctions nationwide quoting some individual weight ranges higher. Those weight ranges that were higher were isolated to sales that were on the low end of prices last week. Nice runs of longtime weaned calves along with fewer calves right off the cow reported at most sales in the country this week. Most offerings now have now been fully preconditioned, however weaned calves in addition to the bawling calves displayed a little extra flesh this week.
Cattle feeders accepted lower prices this week as the Southern Plains market was 3.00 to 4.00 lower at 117.00 while Northern Plains feedyards sold 3.00 lower at 187.00. Packers have been aggressive in purchasing cattle even though margins are not as desirable that they once were. Choice Boxed Beef wavered higher mid-week and closed at 205.59 today, 0.40 lower than last Friday. Weekly actual data for week ending November 25 revealed steer carcass weights are 12 lbs under a year ago. Fed cattle slaughter has ramped up in current weeks with demand still good for beef ribs for the holidays.
In Valentine, NE on Thursday, a load and a half of 651 lb steers with all the bells and whistles sold at 193.00. Also on Thursday at Ogallala, NE a load and a half of 716 lbs steers sold at 181.00. Replacement quality females were also in demand at Valentine. A load of 646 lbs reputation heifers sold for $1150.00/head. Their bigger sisters weighing 686 lbs sold at $1155.00/head. The cattle complex suffered sharp losses late last week and slipped lower all week long. The market was the most active on those heavier calves weighing over 650 lbs that will finish before the summer months. Compared to last Friday's close, the front five Live Cattle contracts were from 1.65 to 3.67 lower. For the same time period, the first four Feeder Cattle futures were from 3.70 to 5.10 lower. Auction volume this week included 44 percent weighing over 600 lbs and 40 percent heifers.
Stocker & Feeder Cattle Weekly Receipts:
Weekly sales of Stocker Calves & Feeder Cattle sold via auctions, direct country sales, and video/Internet sales as reported by the UDSA Market News..
Five Year Moving Average - Stocker, Feeder, & Slaughter Steers:
Cattle Futures Summary: Live cattle futures saw most contracts 5 to 47.5 cents lower today, with a couple back months higher. Feeder cattle futures were down 67.5 cents to $1.175 on the day, as Jan feeders lost 3.39% over the week. The CME feeder cattle index on December 7 was down 61 cents to $154.40. Wholesale boxed beef values were higher on Friday afternoon. Choice was up 51 cents at $205.59, with select $2.14 higher at $185.97. Estimated WTD FI slaughter is at 633,000 head through Saturday, 8,000 head fewer that last week but 25,000 head larger than the same week last year. Cash trade this week fell $3-4 to $117, as a few sales of $118 were reported earlier in the week. Spec funds in cattle futures and options lowered their net long position by 3,073 contracts to 117,010 contracts as of Tuesday.
Mexican Feeder Cattle Weekly Import Summary:
Receipts EST: 34,000 Week ago Act: 35,824 Year ago Act: 25,015
Compared to last week steer calves and yearlings 5.00-10.00 lower. Heifers 5.00-10.00 lower. Trade active, demand good. Supply consisted of steers and spayed heifers weighing 300-700 lbs.
Feeder steers: Medium and large 1&2, 300-400 lbs 165.00-185.00; 400-500 lbs 150.00-165.00; 500-600 lbs 135.00-150.00; 600-700 lbs 120.00-140.00; Medium and large 2&3, 300-400 lbs 150-170.00; 400-500 lbs 135.00-150.00; 500-600 lbs 120.00-135.00.
Feeder heifers: Medium and large 1&2, 300-400 lbs 143.00-160.00; 400-500 lbs 133.00-150.00; 500-600 lbs 123.00-140.00.
Selected Auction Reports:
"Click" on individual.auction links.for complete report
Green Forest Livestock Auction - Green Forest AR
Receipts: 744 Last Week: 866 Year Ago: 627
Compared to one week earlier, slaughter cows steady, slaughter bulls steady, feeder steers 3.00 to 5.00 lower, feeder bulls 2.00 to 5.00 lower, feeder heifers 4.00 to 5.00 lower, steer calves lightly tested, bull calves 4.00 to 8.00 lower,
El Reno Cattle Narrative - El Reno OK
Receipts Week Ago Year Ago
13,312 10,311 10,938
13,312(100%) 10,311(100%) 10,938(100%)
*** Final report *** Compared to last week: Feeder steers sold 3.00-8.00 lower. Feeder heifers not well tested but a much lower undertone was noted. Feeder and Live Cattle contracts on the CME continue to decline causing buyers to be much more selective.
Tulia Livestock Auction - Tulia TX
Receipts: 1411 Last Week: 2759 Year Ago: 2541
Compared to last week: Feeder steers and heifers sold 5.00 to 9.00 lower. Trade activity and demand were moderate. CME futures struggled throughout the week and negotiated cash fat cattle traded lower causing feeder cattle prices and receipts to decline
Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts: 2141 Last Week: 6471 Year Ago: 2388
Compared to last week: Feeder steers 800-850 lbs 15.00 lower, 850-950 lbs 2.00-5.00 lower on a light supply of Medium and Large 1. Feeder heifers not enough Medium and Large 1 for a market test.
Clovis Livestock Auction - Clovis NM
Receipts: 3464 Last week: 4550 Year Ago 4290
Compared to last week, feeder steers mostly 6.00-8.00 lower,instances 15.00 lower on 300-400 lbs calves. Heifers 3.00-7.00 lower, except 400-500 lbs calves 10.00 lower. No compairison on slaughter cows and bulls .
Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts: 2972 Last Week: 3112 Year Ago: 2569
Compared to last week: Steers 600-1000 lbs 3.00-14.00 lower, bulk of trade 4.00-8.00 lower; 600 lbs and under lower undertone noted. Heifers 500-1000 lbs 3.00-8.00 lower; 500 lbs and under lower undertone noted. Trade and Demand light to moderate.
Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts: 4227 Last Week: 4140 Year Ago: 6611
Compared to last week: Steer calves under 600 lbs not well compared, 600-650 lbs 2.00 to 3.00 lower, over 650 lbs 5.00 to 10.00 lower. Heifer calves under 600 lbs steady to 3.00 lower, over 600 lbs 4.00 to 8.00 lower.
Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 2420 Week ago: 1886 Year Ago: 1802
Compared to week ago: 600-700 lb feeder steers instances steady, mostly 2.00-4.00 lower. Feeder steers over 700 lbs 5.00-7.00 lower. Feeder heifers over 600 lbs 2.00-4.00 lower. Steer and heifer calves steady, instances pre-conditioned kinds 1.00-2.00 higher.
Oklahoma National Stockyards - Oklahoma City, OK
Receipts Week Ago Year Ago
8,938 7,074 8,797
8,938(100%) 7,074(100%) 8,797(100%)
***Add Close With Updated Recipts*** Compared to last week: Feeder steers and heifers traded 1.00-5.00 lower with exception to 600-650 lbs trading 1.00-5.00 higher. Steer calves brought steady to 5.00 lower, lightweight heifer calves steady to 3.00 lower, 500-700 lbs 2.00-7.00 lower.
Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts Last Reported Year Ago (11/27/2017)
6,252 5,377 0
6,252(100%) 5,377(100%) 0(0%)
***CLOSE*** No recent Value Added Sale for a true price comparison but compared to Monday's regular feeder cattle auction, steers sold 2.00 to 6.00 higher with some spots sharply higher. Heifers under 600 lbs sold mostly 6.00
to 7.00 higher with instances 10.00 higher,
Blue Grass South Livestock Market - Stanford KY
Receipts: 998 Last Week: 543 Year Ago: 1400
Compared to last Monday:Feeder steers and heifers 2.00-4.00 lower,Moderate demand for feeder classes.Slaughter cows and bulls 3.00-5.00 lower,Moderate demand for slaughter classes.
Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
Receipts: 3468 Last Week: 2805 Year Ago: 4052
Compared to last week: Steer calves unevenly steady except 550-650 lbs 5.00 to 8.00 higher. Heifer calves under 500 lbs 3.00 to 5.00 lower, over 500 lbs steady to 3.00 lower except 550-600 lbs 4.00 to 5.00 lower.
Tri-State Livestock Auction Market - McCook NE
Receipts: 3040 Last Week: 1930 Year Ago: 1850
Compared to last week, steers and heifers were steady - 10.00 higher. Demand was good on all weights of cattle. Buyers in barn and internet were active. Steers accounted for 52 percent and heifers 48 percent of the offering today.
Winter Livestock - La Junta CO...
Receipts: 7821 Last Week: 3543 Year Ago: 7250
Compared with last Tuesday: Steer calves under 500 lbs mostly steady instances 3.00 to 5.00 higher on weaned preconditioned calves, 500 to 600 lbs steady to 2.00 higher, over 600 lbs steady to 2.00 lower.
Huss Platte Valley Auction - Kearney NE
Receipts: 2666 Last Week: 4081 Year Ago: 4455
Compared to last week, steers and heifers sold unevenly steady to 5.00 lower. Nice run of longtime weaned calves along with some calves right off the cow. Most offerings had precondition shots.
Cullman Stockyard - Cullman AL
Receipts: 1024 Last Week: 1278 Year Ago: 1132
Compared to last week: Slaughter cows sold 2.00 to 3.00 lower, bulls sold 2.00 to 3.00 lower. Feeder bulls and steers sold 1.00 to 3.00 lower. Feeder heifers sold 2.00 to 4.00 higher. Replacement cows and pairs sold mostly steady.
Toppenish, WA Livestock Auction - Toppenish WA
Receipts: 2000 Last Week: 2550 Year Ago: 1500
Compared to last Thursday at the same sale, stocker and feeder cattle weak to 6.00 lower following trends on slaughter cattle prices. Trade active with light to moderate demand.
Direct Sales of Feeder & Stocker Cattle:
WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 66 Week Ago: 1,808 Year Ago: 400
Receipts to light this week for an adequate market comparison. Demand was slow this week with several feedlots stating that their receiving pens are full and they will have to wait until slaughter cattle go to harvest before they can procure more feeder cattle.
AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Compared to last week, 325 lb Holstein steers for April delivery traded4.00 lower. Trade and demand moderate. Supply consisted of Holstein steers for April Delivery weighing 325 lbs. Cattle weighing over 600 lbs totaled 0 percent. Heifers totaled 0 percent.
IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts: 0 Last week: 176 Last Year: 345
Compared to the last report: Feeder steers and heifers not tested. Prices based on net weights FOB after a 3 percent shrink or equivalent and 5-10 cent slide on calves and 4-6 cent slide on yearlings from base weights.
Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
This week: 794 Last week: 196 Last Year: 427
Compared to last week: No current FOB delivered cattle for an accurate market test again this week. Supply included 0 percent over 600 lbs; 0 percent heifers.
Colorado Direct Feeder Cattle Report (Fri)
Receipts: 0 Last week: 5,500 Last Year 2,642
Compared to last week: No current FOB trades this week.Demand moderate. Supply consisted of 0 percent over 600 lbs; 0 percent heifers. Unless otherwise stated prices are FOB with a 2-3 percent shrink or equivalent and with a 8-12 cent slide on calves and 4-8 cent slide on yearlings from base weight.
Kansas Direct Feeder Cattle Summary (Fri)
Receipts: 1692 Last Week: 2684 Year Ago: 1385
Compared with last week: not enough steers or heifers for a true market test, however a few cattle sold over last weekend and early Monday steady, the remainder of the week 10.00 lower in a limited test. Sales confirmed on 1530 steers,
Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 0 Last week: 397 Last Year: 0
Compared to last week: No comparable receipts for feeder Steers and heifers. Supply includes 0 percent over 600 lbs and 0 percent heifers. Unless otherwise stated prices are FOB weigh point with a 2-3 percent shrink or equivalent and with a 8-12 cent slide on calves and 4-8 cent slide on yearlings from base weights.
New Mexico Feeder Cattle Report (Mon)
Receipts: 700 Last Week: 300 Year Ago: 1200
Compared to last week: Not enough Current FOB sales for steers or heifers for an adequate market trend. Trade activity and demand were light to moderate demand. CME cattle futures declined and negotiated cash fat cattle traded lower curbing enthusiasm.
Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts: 0 Last Week: 630 Year Ago: 2300
Compared to the last report 2 weeks ago: Feeder steers and heifers not tested. Demand moderate. The feeder supply included 0 percent over 600 lbs and 0 percent heifers.
Oklahoma Direct Feeder Cattle (Fri)
Receipts: 414 Last Week 2,089 Last Year 4,775
Compared to last week: No trend available for an accurate market trend for feeder steers and heifers due to limited receipts. Receipts this week consisted of 96 percent over 600 lbs and 32 percent heifers.
Texas Direct Feeder Cattle (Fri)
Receipts: 7,900 Last Week: 12,250 Year Ago: 28,300
Compared to last week: Current FOB sales of steers and heifers sold mostly 4.00 to 7.00 lower. Trade activity and demand were light to moderate. CME cattle futures struggled throughout most of the week paired with negotiated cash fat cattle trading 4.00 lower at 117.00 caused many sellers to back out of the market.
Extensive U.S. & Canadian Auction Results are available on The Cattle Range
Representative Sales of Cows & Pairs:
Reported by.USDA Market News for the week ending December 8th
El Reno, OK:
Replacement Cows: Medium and Large 1-2 1-4 yr old 775-1100 lb cow 3-7 months bred 800.00-1075.00; pkg 4 yr old 1275 lbs cow 7 months bred 1325.00; 7-10 yr old 1000-1400 lb cow 4-7 months bred 700.00-1100.00 per head.
Pairs: Medium and Large 1-2 6-8 yr old 1200-1325 lb cow w/50-100 lb calf 1075.00-1125.00 per pair.
Replacement Cows: Medium and Large 1-2 1-4 yr old 925-1250 lb cow 4-8 months bred 875.00-1400.00; 5-10+ yr old 950-1300 lb cow 4-8 months bred 850.00-1135.00 per head.
Pairs: Medium and Large 1-2 5-6 yr old 1000-1175 lb cow w/75-100 lb calf 910.00-1060.00; 9-10+ yr old 1125-1250 lb cow w/100-125 lb calf 800.00-925.00 per pair.
Oklahoma City, OK:
Replacement Cows: Medium and Large 1-2 3-5 yr old 900-1325 lb cow 1-7 months bred 700.00-925.00; 7-10 yr old 1025-1375 lb cow 4-7 months bred 685.00-750.00 per head.
Pairs: Medium and Large 1-2 pkg 4 yr old 1600 lb black cow w/350 lb calf 1600.00; 5-9 yr old 1175-1475 lb cow w/100-250 lb calf 1200.00-1310.00 per pair.
Replacement Cows: Medium and Large 1-2 3-5 yr old 1050-1300 lb cow, some black, 4-8 month 1375.00-1450.00; 4-6 month old 1100-1475 lb cow, some black, 2-7 months bred 1060.00-1150.00; 4-9 yr old 1225-1400 lb black cow 2-6 months bred 825.00-1060.00; +10 yr old 1200-1450 lbs cows, some black, 4-7 months bred 760.00-950.00 per head.
Pairs: Medium and Large 1-2 4-9 yr old 1025-1300 lb black cow w/100-300 lb calf 1200.00-1435.00; 6-10 yr old 1025-1275 lb cow w/150-200 lb calf 1025.00-1135.00 per pair.
Replacement Cows: Medium and Large 1-2 Young 860-1250 lb cows 3-8 months bred 875.00-1175.00, per head; middle aged 840-1655 lb cows 3-8 months bred 675.00-910.00, per head; aged 835-1195 lb cows 3-8 months bred 550.00-825.00, per head. First Calf Heifer: 625-885 lbs 1-8 months bred 685.00-900.00.
Cow/Calf Pairs: Medium and Large 1-2 Young 7010-815 lb cows w/100-150 lb calves 900.00-925.00 per pair; middle aged indiv 910 lbs w/150 lb calf 950.00 per pair; aged 1000-1050 lb cows w/90-250 lb calves 825-1000.00 per pair.
Bred Cows: Medium and Large 1 4-5 yrs 3rd stage pkg. 1200 lbs 1500.00. Medium and Large 1-2 2-7 yrs 2nd and 3rd stage 1075-1365 lbs 1050.00-1400.00, 1st stage 1120-1275 lbs 925.00-1000.00; short and solid mouth to aged 2nd and 3rd stage 1100-1355 lbs 665.00-975.00. Large 1-2 5 yrs to short and solid mouth 2nd stage 1400-1585 lbs 975.00-1300.00; broken mouth 2nd and 3rd stage 1395-1480 lbs 735.00-875.00. Medium and Large 2 2-6 yrs 2nd and 3rd stage 900-1200 lbs 900.00-1060.00, 1st stage 1070 lb indiv. 850.00; 7 yrs to short and solid mouth 2nd and 3rd stage 1100-1170 lbs 575.00-750.00. Medium 1-2 3-7 yrs 2nd and 3rd stage 900-1050 lbs 800.00-1050.00, 1st stage 5 yrs pkg. 1000 lbs 850.00; short and solid mouth to aged 3rd stage 1000-1045 lbs 550.00-675.00. Medium 2 2-7 yrs 2nd and 3rd stage 700-1020 lbs 550.00-750.00, 1st stage 875 lb indiv. 525.00; short and solid mouth 2nd stage 740-920 lbs 475.00-510.00 per head.
Cow/Calf Pairs: Medium and Large 1-2 3-5 yrs 1085-1185 lb cows w/babies to 285 lb calves 1250.00-1375.00; short and solid mouth to aged 1340-1345 lb cows w/babies to 170 lb calves and a few rebred 1100.00. Medium and Large 2 5 yr 1070 lb cow w/baby calf 1050.00. Medium 1-2 3 yrs to short and solid mouth 970-1040 lb cows w/babies to 155 lb calves 1000.00-1050.00 per pair.
Bred Cows: Medium and Large 1-2 2-6 yrs most 2nd few 3rd stage 1055-1325 lbs 950.00-1225.00, 1st stage 2 yr 965 lb indiv. 1000.00; short and solid mouth most 2nd few 3rd stage 1110-1385 lbs 750.00-1000.00; broken mouth 2nd and 3rd stage 1110-1340 lbs 630.00-775.00. Large 1-2 2-5 yrs 2nd stage 1235-1460 lbs 975.00-1225.00, 1st stage 1455 lb indiv. 730.00; short and solid mouth to aged 2nd and 3rd stage couple 1480-1495 lbs 800.00-885.00. Medium and Large 2 3-6 yrs 2nd and 3rd stage 1100-1290 lbs 775.00-1000.00; short and solid mouth 2nd stage 1100 lb indiv. 510.00. Medium 1-2 4-5 yrs 2nd and 3rd stage 945-1055 lbs 835.00-1050.00, 1st stage 895 lb indiv. 700.00; short and solid mouth to aged 2nd stage 820-1050 lbs 475.00-650.00 per head.
Cow/Calf Pairs: Medium and Large 1-2 3 yr 1230 lb cow w/165 lb calf 1200.00; broken mouth 1100-1270 lb cows w/babies to 350 lb calves 800.00-1010.00. Large 1-2 short and solid mouth 1400 lb cow w/130 lb calf 1075.00. Medium 1-2 short and solid mouth to aged 935-1010 lb cows w/babies to 180 lb calves 850.00-935.00 per pair.
West Plains, MO:
Bred Cows: Medium and Large 1-2 2-6 yr old 995-1490 lb cows in the 2nd-3rd stage 1050.00-1375.00 per head, 1st stage 950.00-1200.00 per head; 7 yrs to broken mouth 1152-1495 lb cows in the 2nd-3rd stage 950.00-1125.00 per head. Medium and Large 2 2-7 yr old 820-1500 lb cows in the 2nd-3rd stage 750.00-1000.00 per head; Short-solid to broken mouth 899-1375 lb cows in the 2nd-3rd stage 600.00-850.00 per head. Medium 2 3 yr to short-solid mouth 625-1115 lb cows in the 1st-3rd stage 525.00-750.00 per head.
Cow-Calf Pairs: Medium and Large 1-2 Few 3-6 yr old 1195-1282 lb cows with 150-250 lb calves 1275.00-1375.00 per pair. Broken mouth 1085-1170 lb cows with 150-200 lb calves 950.00-1125.00 per pair. Medium and Large 2 3-5 yr old 710-975 lb cows with 250-300 lb calves 1050.00-1275.00 per pair.
La Junta, CO:
Replacement Stock: Medium and Large 1 Young 1165-1350 lbs 1700.00-1900.00, mostly 1800.00-1875.00, heavy load fancy 1130 lbs 2100.00, May calvers 1260-1370 lbs 1425.00-1550.00, summer calvers 1210-1250 lbs 710.00-800.00; middle age 1260-1375 lbs 1250.00-1350.00; aged short solid mouth 1270-1330 lbs 975.00-1010.00, broken mouth 1070-1370 lbs 750.00-850.00.
Cow-Calf pairs: Medium and Large 1 Young 1000-1200 lbs with 100-225 lb calves 1300.00-1400.00, 1250-1300 lbs with 250-325 lb calves 1475.00-1550.00; middle age 1175-1250 lbs with 100-250 lb calves 1150.00-1275.00.
Replacement Cows: Medium and Large 1-2 2-7 year old 850-1250 lbs second & third stage 115.00-125.00/875.00-975.00, first stage/open 70.00-80.00, 7-10 year old second & third stage 46.00-56.00/700.00-800.00 per head.
Cow-Calf Pairs: Medium and Large 1-2 3-7 yr old 800-1200 lb cow w/100-200 lb calf 1125.00-1225.00, few to 1425.00; w/200-300 lb calf 1150.00-1250.00; 7-10 yr old w/100-200 lb calf 975.00-1075.00 per pair.
Alberta Beef Producers: Alberta direct cattle sales so far this week have seen light trade develop with dressed sales ranging from 250.00-250.00 delivered. Sales are generally steady with the previous week. Live sales have been reported in the low 150's and are 1.50 higher than last week's weighted average price. Basis levels did strengthen which did encourage producers to market cattle. All that cattle that traded this week would be lifted in 1 to 2 weeks.
Canadian Cattle Prices:
Prices have been converted to U.S. $/CWT. Grades changed to approximate U.S. equivalents
Exchange Rate: Canadian dollar equivalent to $0.7763 U.S. dollars
Prices for the week ending December 1st:
Feeder Cattle Demand
Steiner Consulting Group Daily Livestock Report
The demand for feeder cattle from feedlots in the second half of this year has been one of the surprises of the cattle market in 2017. This demand is reflected in the size and trend of the price premium between heavier feeder cattle and slaughter cattle prices. The behavior of this premium followed a typical seasonal pattern through late July. A combination of favorable corn crop development weather in July and strong Live Cattle futures prices for 2018 delivery contracts that began during the summer have provided the foundation for excellent feeder cattle demand.
The peak in the premium of feeder cattle prices relative to slaughter cattle values for the year occurred in early October. Cattle producers placated feedlot operators willingness to pay higher prices by selling more cattle to feedlots. Year-to-date placements of cattle into feedlots are up 9% from 2016 through October. Placements in October were up 10% from the prior October.
In recent months, weekly data on receipts of feeder cattlmoving through marketing channels by USDA-AMS (Agricultural Marketing Service) has tracked consistently with trends seen in monthly feedlot placements reported by USDA-NASS (National Agricultural Statistics Service). Weekly feeder cattle receipts in October were up 9.9% from the prior October. The graph above shows the pattern of receipts during the last three months with a peak that lagged the high point of the ratio between feeder cattle and slaughter cattle prices by 3-4 weeks. Similarly, receipts fell below year earlier volumes in mid-November, again consistent with the relationship between feeder and slaughter cattle prices 3-4 weeks prior. The last three weeks have seen receipts below prior year volume in each week, only the third time this has happened in 2017.
The other times that occurred was in August and May. Total feeder cattle market receipts for the four weeks in November (the last week ending on December 2) were down 0.8% after starting out the month significantly higher than a year ago.
The bulk of the decline in feeder cattle marketings in November is accounted for by fewer cattle weighing over 600 pounds. November receipts of these heavier weight cattle were down 9.7% from last year. Calves born in 2016 are the dominant source of supply for these feeder cattle marketings and the 2016 calf crop was only up 3% from the prior year. The larger marketings in prior months of 2017 was probably at the expense of feeder cattle marketings in November.
Will Meat Distributors Become Dinosaurs?
Janette Barnard - MeatingPlace.com.Will Amazon send Meat Distributors the way of the dinosaurs?
As Amazon moves further into food retail, distributors should critically evaluate their competitive advantage - not only evaluating business results, but the entire business model. Lest Amazon be their foe.
Perhaps that sounds a bit far fetched. After all, distributors have always been and will always be part of the meat supply chain... right? Sysco, US Foods, and PFG compete as broadline distributors. Companies like Colorado Boxed Beef and Sherwood Foods compete as specialists in animal protein.
But food distribution is on the brink of disruption - distributors should stop focusing on their traditional competitors and start establishing a competitive advantage against the competitor no one wants, Amazon.
Let’s look at the role of distributors, the core competencies of Amazon, and imagine how (if?) the two can coexist in the Amazon era of meat.
Both broadline and specialized protein distributors play the intermediary role of getting product to customers that are either too small for a processor to deal with directly, or have some specialized business need.
Most distributors believe their competitive advantage is tied to their ability to source product “right” and in their vast logistics networks. Many will say they might make a couple of pennies on meat, but there are nickels and dimes to be made arbitraging freight.
It’s a great model that greases the wheels of the supply chain to keep meat moving between all suppliers and customers, from behemoth packers to mom & pop restaurants. Its been a great model for decades.
But has this model run its course?
Amazon has made extraordinary logistics capability core to their entire value proposition. To be sure, distributors are unlikely to “out logistics” Amazon.
As an Amazon prime member, I can order 40 items or 2 items and they’ll show up on my doorstep within 48 hours… shipping cost free. Those facts hold true for people from urban Dallas to rural Arizona and everywhere in between.
Now let’s say I run a mom & pop restaurant in Cleveland. I can purchase ingredients from a Sysco or a small regional distributor and pay more per item plus have higher cash outlays because of high minimum volume requirements for the distributor to drop items.
Or… I can sign up for Amazon Prime.
And get the right amount of product delivered at the right time… At the really right freight charge.
You may have heard examples of this happening already with dry goods, but what happens when Amazon figures out the meat supply chain and starts competing directly with distributors?
Note from TCR:
Imagine a beef industry in which one dominant company buys a major percentage of all beef? Fewer buyers competing for the available supply of any commodity always results in lower prices to the producer.
USDA National Retail Beef Report:
Advertised Prices for Beef at Major Retail Supermarket Outlets
This week in beef retail, the Feature rate posted a 6.9 percent increase, the special Rate and the Activity Index fell by .6 percent. Retailers has begun their holiday features with Bone-In Ribeye Roasts taking center stage along with other Loin cuts in hopes beef will be the primary protien source for family gatherings this season. cuts from the Rib, Chuck, Loin, and Ground beef items saw more ad space while cuts from the Round and Brisket saw less. Cattle Slaughter under federal inspection saw a 1.9 percent decrease.
Changes to the U.S. Beef Grade Standards
The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) announced on December 5th that it is updating the voluntary U.S. Standards for Grades of Carcass Beef. USDA quality grades are used by companies to provide information to purchasers about meat’s tenderness, juiciness, and flavor and are a major factor in determining the value of beef and live cattle.
This update to the standards will provide companies using the USDA grading program with additional options – dentition or age documentation – to establish the maturity of animals and ensure that cattle 30 months old, or less, are included in the youngest maturity group recognized as “beef” (A maturity). Skeletal and muscular evidence will still be used to determine maturity for those animals over 30 months of age.
This change for voluntary beef grading activities will be implemented on Monday, Dec. 18, 2017. Companies using the USDA voluntary grading program must do the following prior to Monday, Dec. 18, 2017:
Provide documentation to the AMS Supervisor and Graders describing how carcasses over 30 months of age (MOA) are identified and segregated within the plant. AMS will review these procedures either during routine QSA audits or during supervisory visits.
Plants with a Quality Systems Assessment (QSA) program (e.g., for Export Verification) will provide the applicable section from their quality manual which details this process.
Plants without a QSA program will document their process through a Standard Operating Procedure or similar document.
Ensure the AMS Supervisor and Graders are aware of how carcasses over 30 MOA are identified/marked. The carcasses must be identified in a manner that allows the AMS Grader to easily see the identification when presented for grading.
On Monday, Dec. 18, 2017, companies may only offer carcasses for initial quality and/or yield grading. No carcasses shall be presented for grading that were held as regrades from the previous week.
Photo of the Week:
"Shootin' the Bull" Weekly Analysis:
In my opinion, sentiment change has been abrupt. There are a multitude of reasons stemming from the liquidation of funds to analysts overwhelming alarms of supply. On Thursday, Japan released a much better than anticipated 3rd quarter GDP. Expansion of their economy came on the heals of an improved global economy. Recall that Japan is our largest export market. This is perceived as good news. Friday, the US released its latest employment report suggesting 228K new jobs were filled in November with an unemployment rate of 4.1%. Significant structural damage has been done this year from two hurricanes, the massive California wild fires, and drought setting in around the mid-west. These factors spur spending from the increase of manufactured goods that were destroyed to the labor pool needed for reconstruction.
These factors are perceived a contributor to the increase of employment as well as potentially sustaining the growth for some time. How does this relate to beef? More consumers working suggests a higher rate of consumption of everything. Energy continues to move higher and remain elevated. This is a good sign of economic vitality. Where as most all bears are focused solely on supply, I believe that including the steadily increasing exports and increasing domestic employment will help to curtail aspects of a bear market.
I do not believe this environment is a bear market. Cash has not softened to any extent compared to the $13.00 plus decline in fat futures and over $16.00 in feeder futures. With all of this stated, it does not help the fact that futures have been weak for over 4 weeks now and declined a significant amount. Long way around the barn, but my analysis has not changed. I anticipate the demand to continue to be reflected through the aggressiveness of elevated kills. The wave count has changed to suggest the current decline is the intermediate wave 2 of major wave 3. Most contract months are at .618% retracement levels at this weeks low. With seemingly no weather or risk premium on the cattle after this selling deluge, I would be overly cautious about wanting to market inventory with futures at this price level.
Traders have moved the basis out significantly positive. So much so that this week I have recommended owning the March $154.00 calls. ***This is a sales solicitation.*** For a feed yard that will be wanting inventory this spring, a portion of the basis can be captured with options that produces a limited risk hedge and captures price dollars under the current. As stated above, I would be hard pressed to want to market inventory $8.00 to $10.00 less in just 3 months than at present. I anticipate that just the steep discount of the futures will begin limiting the desire to make sales at these levels. The wave count changed for the feeders as well to this being an intermediate wave 2. The ABC pattern is a normal corrective pattern with Fibonacci retracement levels met and little to suggest anything different.
Grains remain in a weakened state. However, this week the bean market pulled away from its corn and wheat comrades. Of most interest though is the bean meal. Bean meal set a new contract high this week. Although it has retraced some of those gains by weeks end, the path of least resistance appears to the upside. Although corn may continue to lag, the meal appears to be moving higher.
Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
U.S. Cattle Import Trends
Livestock Marketing Information Center
The U.S. is on track to import more cattle from Mexico and Canada in 2017 than a year ago. Still, the imports are projected to be below 2015's. The vast majority of cattle imported from Mexico are feeder animals, but from Canada, all types of cattle are purchased. The major categories are feeder cattle, slaughter steers and heifers, and slaughter cows. USDA's Animal Health Inspection Service (APHIS) establishes requirements, reviews documentation, and inspects cattle prior to being allowed into the U.S. In this article, the preliminary weekly data on the animals imported will be used, as collected by APHIS and then compiled/published by USDA's Agricultural Marketing Service.
Some of the feeder cattle purchased from Mexico go directly into U.S. feedlots while others, especially the light-weight animals, are put on U.S. pasture to gain several hundred pounds before going into a U.S. feedlot. Year-to-date (through mid-November) Market News reported that about 185,000 more feeder animals had been imported than a year ago. That's a 25% year-over-year increase. LMIC projects that for all of 2017 imports will be about 1.16 million head, the largest since 2012. The Mexican cowherd has been growing in recent years, and that has combined with relatively strong U.S. calf prices to pull animals north.
U.S. imports of Canadian cattle are on a downtrend. The Canadian cowherd has been stagnate the last two years and is dramatically smaller than it was 10-years ago (national beef cowherd down over 1.2 million head or 25% during the last decade). So far this year, total U.S. cattle imports from Canada were down about 120,000 head year-over-year (a decline of 17%). LMIC projects that for the full year imports will be just over 660,000 head. Compared to 2016 levels, imports of Canadian feeder cattle have been down 37%, slaughter steers and heifers up 5%, and cows and bulls dropped 26%.
Focusing on just feeder cattle imports, driven by more animals from Mexico, LMIC projects 2017's imports from both Mexico and Canada to be higher year-over-year (up about 16%). If realized, the total will be about 1.3 million head. That's equivalent to 3.6% of the 2017 U.S. born calf crop, as estimated by USDA-NASS in their mid-year count. That percentage is up some from 2016's (3.2%). For many decades, a significant number of Mexican and Canadian origin animals were grown on U.S. forages and in U.S. feedlots, but the source of those animals has been shifting more toward Mexico.
U.S. Dollar - 6 Month Chart:
Over the last 5 years, an average of around 10% of U.S. beef production has been exported, making exports an extremely important factor affecting beef and cattle prices. A strong dollar depresses export demand.
Choice Boxed Beef Cutout, Slaughter, & Feeder Steers:
Boxed beef cutout values firm on Choice and sharply higher on Select on moderate to good demand and moderate to heavy offerings. Select and Choice rib, round, and loin cuts steady to firm while chuck cuts firm to higher. Beef trimmings mostly sharply lower on light demand and heavy offerings.
US export trade data from October shows a record for that month at 259.996 million pounds of beef shipped. That is 13.6% larger than a year ago and 7% above September.
Beef exports for the week ending Nov 30 were 16,444 MT, 15.31% larger than last week. Export commitments of beef for 2017 to date are 8.2% larger than last year.
The average value of hide and offal for the five days ending Fri, Dec 08, 2017 was estimated at 10.63 per cwt., down 0.01 from last week and down 1.08 from last year.
The Major Livestock & Poultry Market Concern
Livestock Marketing Information Center
For the next two years, the major market outlook issue or headwind for all the U.S. livestock and poultry markets is the sheer tonnage of product that will be produced. In both 2018 and 2019, forecasts call for record large total U.S. red meat and poultry output. It is important to note that even though many consumers do some substituting between categories, it is not one-for-one. That is, for example, in the overall retail marketplace one pound of beef does not substitute for that same amount of chicken.
For 2015 through 2017, U.S. production of red meats (beef, pork, lamb, and veal) plus poultry (chicken and turkey) set a new record high each year. In 2017, LMIC projects output will be 2.5% larger than 2016's. U.S. production of beef this year is projected to be the largest since 2011, while both pork and chicken set all-time highs.
Putting 2017's tonnage into context by adjusting for U.S. population growth, international trade (quantity of products exported and imported), and frozen stocks carried-over from one year to the next, gives per person domestic market disappearance. That per capita calculation does not remove meat and poultry (skeletal muscle) in pet foods. Estimated per capita retail weight disappearance of beef in 2017 will be the largest since 2012, pork essentially unchanged compared to 2016, and chicken a new record high.
On a retail weight basis, 2017's total red meat and poultry disappearance is projected by the LMIC at 115.5 pounds per person, up 1.6 pounds from a year ago. Forecasts for 2018 and 2019 are for 218.5 and 220.9 pounds per capita, respectively. If realized, both those years would be the largest since 2007's. Those levels are not unprecedented, but the 2019 forecast is only one pound below the record high set in 2004.
Farmers Feel Ag Economy Deteriorating
CURRENT ECONOMIC SENTIMENT BRIGHTER THAN FUTURE.
U.S. farmers see the current state of the ag economy less of a concern than in the future.
In its latest survey results Wednesday, for November, the Purdue University/CME Group Ag Economy Barometer shows that producers expressed lower sentiment toward the agricultural economy in November on the heels of fall harvest, according to the Purdue University/CME Group press release.
For November, the barometer was recorded at 128, a 7-point decline from October’s 135 and the second-lowest reading of 2017. The barometer is based on a monthly survey of 400 agricultural producers from across the country, the release states.
“The November slide in sentiment was primarily driven by reduced optimism about the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “We saw the Index of Future Expectations fall by 10 points, while the barometer’s other sub-index, the Index of Current Conditions, held steady at 129.”
When asked what they thought about the next 12 months, farmers responded that the bad times will outweigh the good times financially for the agricultural economy; 62% said they thought the next 12 months will be bad times financially in U.S. agriculture, according to the released statement.
The statement indicates that the percentage of producers expecting bad times in agriculture has been increasing since July when 50% of survey respondents said they were expecting bad times.
“Throughout 2017, survey respondents have been asked about agricultural trade in an effort to understand how proposed policy changes might be impacting producer sentiment. When asked about the importance of agricultural exports to the overall U.S. agricultural economy, 96% rated them as important,” according to the press release.
The survey also asked producers about the North American Free Trade Agreement (NAFTA).
“When we asked producers about NAFTA specifically, they were less confident about its importance to the U.S. agricultural economy,” Mintert said. “While 70% did rate it as important, a substantial 20% rated NAFTA as neutral, meaning neither important nor unimportant.”
On a regular basis, the survey asks respondents about their expectations for farmland prices. For the first time in survey history, more producers said they expect higher farmland values than lower farmland values. Among respondents, 21% said they expect farmland values to turn higher in the next 12 months, 62% thought values would remain unchanged, and 17% expect lower farmland values, according to the press release.
Feeder Steers/Corn Correlation:.Historically, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers..
Slaughter Cows & Bulls:
Slaughter cows sold 2.00-5.00 lower, except in the Southeast cows and bulls trading steady. Slaughter bulls 1.00-2.00 lower. Demand light to moderate in all regions.
Cutter Cow Carcass Cut-Out Value Thursday was 169.57 -- Up 1.76 from last Friday.
Weight Colorado Oklahoma Alabama
Breakers 1100-1600 55.00-59.00 53.00-56.00 49.00-52.00
Boners 1000-1450 54.00-59.00 54.00-57.00 50.00-55.00
Lean 1000-1300 48.00-51.00 52.00-55.00 44.00-49.00
Bulls 1300-2500 76.00-81.00 75.00-78.00 70.00-73.00
# Head Week Ago Year Ago YTD Year Ago
National 8,112 8,049 8,265 46,326 42,267
S Central 2,566 2,607 2,313 13,561 12,060
N Central 679 465 457 4,007 3,176
East 2,118 2,254 2,118 12,324 10,406
West 1,065 1,211 1,513 6,863 7,242
Midwest 1,684 1,512 1,864 9,571 9,383
Est. Weekly Meat Production Under Federal Inspection:
Total red meat production under Federal inspection for the week ending Saturday, December 09, 2017 was estimated at 1070.5 million lbs. according to the U.S.Department of Agriculture's Marketing Service.
This was 0.6 percent lower than a week ago and 3.8 percent higher than a year ago. Cumulative meat production for the year to date was 3 percent higher compared to the previous year.
Weekly Hay Reports: "Click" on links for detailed report
Washington - Oregon (Columbia Basin)
Weekly Feedstuffs Market Review:
The USDA reports feed ingredient prices for the week ending December 5, 2017 were mixed.
Soybean Meal was 15.50 to 20.00 higher. Cottonseed Meal was steady to 11.00 higher. 5.00 lower to 10.00 higher. Canola Meal was 10.00 to 17.90 higher. Linseed Meal was steady to 15.00 higher. Sunflower Meal was 5.00 to 15.00 higher.
Whole Cottonseed was mixed.
Crude Soybean Oil was 5 to 63 points lower. Crude Corn Oil was 100 points higher.
Ruminant Meat and Bone Meal was steady to 25.00 lower. Ruminant Blood Meal had limited comparable sales. Feather Meal was mostly steady to 5.00 lower. Menhaden Fishmeal was steady to 5.00 higher.
Corn Hominy was mixed, 3.00 lower to 9.00 higher. Corn Gluten Feed was steady to 5.00 higher. Corn Gluten Meal was steady to 5.00 higher.
Distillers Dried Grain was 1.00 to 10.00 higher.
Wheat Middlings were steady to 15.00 higher. Wheat millrun was steady to 3.00 lower.
5 Year Bullish/Bearish Consensus Charts:
The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
They get too bullish after prices have risen and too bearish after they have already fallen.
Because of this tendency, there are often extremes in opinion right before major changes in trend:
When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead.
And when they become too bearish, then prices tend to rise.
So when Public Opinion moves above the red dotted linein the chart, it means that compared to other readings over the past year, you're seeing excessive optimism. You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion. Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.
Conversely, when Public Opinion moves below the green dotted line, then the public is excessively pessimistic about the commodity's prospects for further gains compared to their opinion over the past year. Looking for absolute readings under 20% (or especially 10%) often indicates an upturn in the market.
Bullish/Bearish Consensus: Cattle
Bullish/Bearish Consensus: Corn
Stock Markets & Economic News
U.S. stocks climbed to records as the latest jobs report bolstered optimism in the world’s largest economy, continuing equity rallies that took hold in Asia and Europe. The dollar posted its best week this year.
The S&P 500 Index and Dow Jones Industrial Average closed at all-time highs in light volume after data showed hiring increased by more than forecast in November and the unemployment rate held at a 17-year low. The dollar briefly edged lower as investors assessed tepid wage growth that missed estimates, then resumed its fifth consecutive gain. Ten-year Treasury yields inched higher.
The jobs data add to a run of recent news that bolstered investor optimism after the U.S. government averted a shutdown and tax reform negotiations made progress. Looking ahead to next week, traders see an interest-rate increase by the Federal Reserve as pretty much a given.
Bigger Cattle = Thinner Steaks
The Washington Post
If you've dined at a steakhouse recently or grilled rib-eye for dinner, you may have noticed a curious trend: Steaks are getting thinner.
As U.S. beef cattle have ballooned in size, experts say, restaurants, grocery stores and meat processors have had to get creative in how they slice and dice them up. Increasingly, that means thinner steaks -- as well as more scrap meat and "alternative" cuts designed to make the most of a bigger animal.
The cattle industry argues that it provides cheaper and more plentiful beef from fewer cattle. But there's emerging evidence that Americans dislike the changes to their steaks. And that could hurt the beef sector in the long-run.
"If you buy a steak, you have a picture in your mind of what it should look like," said Josh Maples, an agricultural economist at Mississippi State who has studied the new cuts. "If you make that thinner, or you cut it in half -- for many people, that ruins the eating experience."
It's no secret that beef cattle are getting bigger -- for decades, federal policymakers, academic researchers and industry scientists have striven to beef them up. What may be less obvious to many consumers is how those larger cattle lead to thinner steak cuts.
According to Department of Agriculture data, the weight of the average beef cow hovered around 1,000 pounds until the mid-'70s, when advances in genetics, nutrition and growth-promoting hormones began to produce larger animals. Since 1975, the weight of the average cow at slaughter has increased by roughly nine pounds each year — from 996 pounds in 1975 to a whopping 1,363 pounds in 2016. ("Cow" technically refers to adult females, only, but is used colloquially for cattle in general.)
As a result, experts say, U.S. ranchers now produce more beef at a lower cost than they did 40 years ago, even though herds have shrunk by 13 million.
But larger cattle also means larger muscles. For restaurants and grocery stores, that has proved a challenge.
"It's a lot more work for our meat-cutters, I'll tell you that," said Travis Doster, the spokesman for Texas Roadhouse, a steakhouse chain with more than 400 locations.
The issue, Doster and others say, lies in the growing diameter of cows' muscles: things like the longissimus, from which rib-eyes, top loins, sirloins and chuck eye are cut.
"Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
The NWS WPC 7-Day Quantitative Precipitation Forecast (QPF) calls for dry conditions across the western U.S., Plains, and lower Midwest while liquid precipitation accumulations of <1.5 inches are expected in the upper Midwest, New England, eastern portions of the Mid-Atlantic, Southeast, and Gulf Coast. Some slightly higher accumulation (2-to-3 inches) are expected across the coastal plains of the Carolinas.
The CPC 6-10-day outlook calls for a high probability of above-normal temperatures across the western half of the conterminous U.S. as well as in Alaska while below normal temperatures are expected in the eastern third of the U.S. In terms of precipitation, below normal precipitation is expected across most of the West, southern Plains, South, Southeast, lower Midwest, and Mid-Atlantic while there is a high probability of above normal precipitation for the upper Midwest and western portions of New England.
Fed Cattle Market... Sliding Slowly South
Cassie Fish -- cassandrafish.com
The erosion of CME cattle futures and negotiated cash cattle prices continue today. There’s nothing remarkable about this year’s seasonal decline- sell-offs are contained and small rallies bubble up from time to time. But there is a sense that rallies are unsustainable and further decline is likely. With most of the cattle feeding industry hedged, buyers seem scarce and the sellers, mostly managed money, so far are liquidating long positions in a quiet and methodical manner.
This week’s negotiated cash trade spread out over 2 days, and seems close to finishing up in the last hour at $117 south and $187 north. The fact that a few plants needed quite a few cattle for next week provided zero support as the leverage has fallen firmly into the packers grasp once again.
The choice cutout, quoted at $206.40 yesterday afternoon, is about $7 off the Q4 high and expectations are for a retracement to $200 to $203 by year’s end. This means the packers’ prime intent is to widen margins back out the remainder of the year, and avoid letting product develop any age issues ahead of the holiday.
This week’s kill is estimated to be smaller than last week’s whopping 649k, but guesses still range from 630k-640k, insuring plenty of product for the pipeline. This week’s slaughter will beat last year’s 608k easily and will be the largest for this week since 2012. End user interest is expected to be sparked for January features by year’s end, especially if the cutout approaches $198 to $200, levels reached in October.
Steer carcass weights have likely topped at 904 pounds during the week ended November 25, 12 pounds under a year ago. Carcass weights will decline between now and year’s end, as much as 5 to 7 pounds. Beef production will start to modestly back off the remainder of December and Q1 2018 beef production is expected to be only slightly larger than Q1 2017.
In data just released, the fed slaughter for Thanksgiving came in 466k head, the largest Thanksgiving week fed kill since 2007. This speaks volumes regarding the success by beef packing companies in the past 18 months to increase capacity utilization and to the expansion of beef demand worldwide in the past year.
Feedyard Closeouts: Profit/(Loss)
Closeout projections are for cattle placed on feed by a cattle owner at a commercial feedyard and not for cattle owned by a feedyard and fed at cost or a farmer/feeder utilizing his own feed.
Typical closeout for un-hedged steers sold this week:
Placed On Feed 165 days ago = June 26th
P/(L) based on the futures when placed on feed: ($57.16)
Cost of 750 lb. steer delivered @ $147.74 per cwt: $1,108.05
Feed Cost for 600 lbs. @ $77.08 per cwt: $462.48
Interest @ Prime + 2% on cattle cost for 165 days: $28.80
Interest @ Prime + 2% of the feed cost for 165 days: $6.01
Total Cost & Expense: $1,605.34
Sale proceeds: 1,350 lb. steer @ $117.00 per cwt: $1,579.50
This week's Profit/(Loss) per head: ($25.84)
Profit/(Loss) per head for previous week: $13.03
Change from previous week: -$38.87
Sale price necessary to breakeven: $118.91
Projected closeout for steers placed on feed this week:
Projected Sale Date @ 165 days on feed = May 22nd
Cost of 750 lb. steer delivered @ $155.65 per cwt: $1,167.38
Feed Cost for 600 lbs. @ $73.02 per cwt: $438.12
Interest @ Prime + 2% on cattle cost for 165 days: $31.66
Interest @ Prime + 2% of the feed cost for 165 days: $5.94
Total Cost & Expense: $1,643.10
Sale proceeds: June Futures @ $112.97 per cwt: $1,525.10
This week's Profit/(Loss) per head: ($118.00)
Profit/(Loss) per head for previous week: ($99.14)
Change from previous week: -$18.86
Sale price necessary to breakeven: $121.71
Typical closeout for hedged steers sold this week: ($57.16)
Typical closeout for un-hedged steers sold this week: ($25.84)
Projected closeout for steers placed on feed this week: ($118.00)
Slaughter Cattle: Friday trade was limited on light demand in Nebraska and the Western Cornbelt. In the Western Cornbelt, a few live purchases were reported at 117.00 steady compared to Thursday. Trade was mostly inactive on light demand in all other feeding regions. The latest established market in any feeding region was on Thursday with live purchases at 117.00 in the Southern Plains. On Thursday in Nebraska, live purchases ranged from 117.00-118.00 with dressed purchases for the week mostly at 187.00. In Colorado for the week live purchases traded from 118.00-118.50. On Thursday in the Western Cornbelt, dressed purchases traded from 186.00-188.00.
Negotiated Sales: Confirmed: 4,234 Week Ago: 27,420 Year Ago: 25,065
Formula Purchases: Net - Dressed
Head count priced today: 13,900
Weighted avg weight: 877.00
Weighted avg net price: 194.08
Livestock Slaughter under Federal Inspection:
CATTLE CALVES HOGS SHEEP
Friday (est) 114,000 2,000 459,000 7,000
Week ago (est) 118,000 2,000 465,000 7,000
Year ago (act) 114,000 3,000 439,000 7,000
Week to date (est) 591,000 10,000 2,313,000 41,000
Last Week (est) 595,000 10,000 2,290,000 41,000
Last Year (act) 573,000 11,000 2,189,000 42,000
Saturday (est) 42,000 0 224,000 2,000
Week ago (est) 50,000 0 245,000 1,000
Year ago (act) 35,000 0 260,000 0
Week to date (est) 633,000 10,000 2,537,000 43,000
Last Week (est) 645,000 10,000 2,535,000 42,000
Last Year* (act) 608,000 11,000 2,448,000 42,000
2017 YTD 29,959,000 470,000 113,336,000 1,816,000
2016 *YTD 28,418,000 447,000 110,631,000 1,886,000
Percent change 5.4% 5.2% 2.4% -3.7%
A Call For Liquidity In Futures Markets
Ag Center Cattle Report
Extreme volatility has plagued the CME cattle futures for a couple of years. Price moves like this past week are all too frequent and leave industry players scratching their heads as to the causes of the largely unexplained moves. Solutions have been widely varied and certainly moves by the Exchange to pare trading hours to the daytime session certainly helped. The problem boils down to contract construction and traders who are unwilling to trade a product they can’t see and/or understand. This in turn impacts liquidity and lower liquidity means higher volatility.
There is no way to prevent market moves or sudden changes in price caused by market events or news. This is healthy. Markets react to live and continuing news surrounding the marketplace. Sometime that news is disruptive to the point of causing limit moves. Less significant news reports have smaller impacts. Traders attempt to take new information and act on it in an effort to capture market impacts. This is the way markets should work.
The internet has introduced a new dynamic into the market – quick delivery of information and the potential for viewing the impact on the cash market in real time as transactions occur. This tool has been underutilized by the beef industry but the CME will introduce a new Bitcoin futures product on December 18th. The Bitcoin cybercurrency is capturing headlines for its runaway skyrocketing price. Traders in the futures price will be able to view the cash market in Bitcoin as it occurs and the futures contract will cash settle to the latest price in the spot market. The Bitcoin market is built on blockchain technology that has broad applications in the cattle industry.
The CME feeder contract is cash settled but the model for calculating the cash index and the method for gathering of data are outmoded and CME is looking for new technologies to gather and calculate the index. No technology fits the need better than a blockchain or series of time stamped buy/sell feeder transactions linked together in a manner that creates a fully transparent market in feeder cattle. A blockchain will instill confidence of all traders and industry players in the integrity of price settlement as would a blockchain in the live contract.
The feeder market is challenged in a way not present with fed cattle sales. Fed sales are all consummated through four primary beef processing companies thus providing the infrastructure for reporting of almost all transactions in the fed cattle trade. Feeder cattle are traded through an opaque network of hundreds of dealers and direct farmer to feedlot relationships. This requires a foundation to force the reporting for yearlings and calves sold in the marketplace.
Identifying the national cattle herd with an ID for each animal is just such a foundation. This would create the need for reporting each transaction as it occurs because each buy/sell trade involves a change in ownership that must be reported to the national datastore. Along with capturing an ownership change both change assuring the proper title and lienholder, the transaction would create a price point for the transaction and link it into the blockchain. Blockchains are the perfect vehicle for handing each transaction and provide the complete unimpeachable record of the cash market in all cattle trades. This instills confidence into the marketplace for futures and recruits new traders. Those traders, who have previously stood aside from the cattle futures, bring the necessary liquidity our markets sorely need.
National Grain Summary:
Compared to last week, cash bids for corn, and wheat were mixed, sorghum was lower, and soybeans traded higher. The soy complex rallied in the middle of the week over concerns of dry weather conditions in South America. The weekly high so far was on Tuesday, with January soybeans closing at 10.08 1/2 and January soybean meal closing at 343.30. Weekly export reports show export sales and shipments for corn totaled 34.5 and 23.3 million bushels, export sales and shipments for soybeans at 74.1 and 74.2 million bushels, and export sales and shipments for wheat totaled 11.8 and 14.6 million bushels. All export sales and shipments could be viewed as bearish this week. Wheat was mixed, from 23 3/4 cents lower to 26 1/4 cents higher. Corn was mixed from 3 1/4 cents lower to 16 3/4 cents higher. Sorghum was 1 to 7 cents lower. Soybeans were 1 1/4 to 6 1/4 cents higher.
Corn futures saw gains of 1/4 to 1 1/4 cents on Friday, as Dec gave back last week’s gains, down 1.38% for the week. The weekly Commitment of Traders report showed spec traders continuing to reduce their net short position by another 36,244 contracts last week. Their CFTC net short position was at -160,519 contracts in corn futures and options as of last Tuesday. Ahead of next Tuesday’s USDA supply and demand report, analysts are expecting to see Brazil production trimmed nearly 1.74 MMT from November to 93.26 MMT. These assumptions are mostly based on lower planted acreage.
Wheat futures closed the Friday session with most CBT and KC contracts 2-4 cents lower, as a few MPLS contracts were fractionally higher. Nearby Chicago futures lost 5.43% on the week, with Dec KC wheat down 4.7% since last Friday. The Friday Commitment of Traders report showed the spec traders reducing their net short Chicago wheat positions by 3,993 contracts in the week ending last Tuesday. They were net short 118,781 contracts at that time. The Argentine wheat harvest was estimated at 44.7% complete by BAGE on Thursday. Japan purchased 154,694 MT from Australian, Canada, and the US in this week’s MOA tender, with 64,495 MT US origin.
Five Year Moving Average - Corn & Wheat:
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