Cattle Market Notes: Week Ending Oct 24, 2014

Cash Cattle:

Cash fed cattle prices were higher this week. The five-area live and dressed steer prices were $168.67 and $263.80, respectively, up $4.93 and $6.05. In Kansas and Texas, live cattle traded steady at $170 on Thursday. Live and dressed cattle sold at $170 and $265 in Nebraska. Similarly, in the Western Cornbelt, cattle sold at $170 and $264-$265, respectively for live and dressed.

Most reported Mississippi calf and feeder prices were steady to higher this week. Steer calf prices were steady to $15 higher and feeder steers were steady. Heifer calves were steady to $20 higher and feeder heifers were steady to $2 higher. Cull cows and bulls were steady. Feeder steers were $2-$4 lower and heifers were steady to $2 lower in Oklahoma City. Steer calves were $1-$5 higher and heifer calves were $5-$8 lower.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Feeder futures made an attempt at regaining some of last week’s losses. Most contracts were up about $1 compared to the previous Friday’s close. Some mixed reports from auction barns across the U.S. had the market floundering. Live cattle, on the other hand, had a strong week, ending mostly $1.50-$3.50 higher. Strength in the cash market prompted the rally. The week ended with USDA releasing the October Cattle on Feed report. The report revealed 0.5% fewer head of cattle in feedlots, 10.058 million head total, but higher year-over-year placements, 2.007 million head, as a result of record low placements in September last year. For more details on this report CLICK HERE.

Corn futures ended the week mildly higher. Currently, the market is adjusting as harvest continues and elevators adjust to the level cash sales versus those producers electing to store grain.

Beef:

Wholesale Choice boxed beef prices moved higher until mid-week and then slipped back, falling sharply on Friday. Choice boxes averaged $249.50, up $0.25. Select boxes ended the week at an average of $234.28, down $1.24.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

October Cattle On Feed Recap

The United States Department of Agriculture’s National Agricultural Statistics Service (USDA, NASS) released their monthly Cattle on Feed report Friday afternoon (Oct 24). The report revealed that 10.058 million head of cattle were in U.S. feedlots with a capacity of 1,000 head or larger on October 1, 2014. Placements into feedlots during the month of September totaled 2.007 million head while marketings during the same month totaled 1.683 million head.

[ … For detailed numbers and charts CLICK HERE … ]

Placements totaled 2.007 million head, an increase of 1.0% from September 2013 but a 11.3% decrease from the five-year average from 2009 to 2013. This marks the first increase since February and only the third for the year (January was the other year-over-year increase). The increase from last year is the result of extremely small placements in September, the lowest on record, and the current September reading is the third lowest (being beat out by September 2012 by 3,000 head). The average of analysts’ expectations called for an increase of 1.4% from last year and the range of expectations was wide, running from -6.9% to +7.0%. So, it was somewhat expected that placements would increase. This is a rational thought when considering the high price levels seen for feeder cattle during September, therefore urging producers to send cattle into feedlots.

Placements by weight group were mixed with cattle placed weighing less than 600 pounds being down 1.1% from last year, those placed between 600 and 699 pounds up 1.5%, placements between 700 and 799 pounds down 8.0%, and placements over 800 pounds up 8.0%. The average placement weight increased marginally month-over-month to 725.6 pounds, and is about five pounds higher than the 5-year average of 720.5 for September. Placements in the major feeding region (CO, KS, NE, and TX) were higher in all states but Texas (down 5.3%).

Cattle marketed in September totaled 1.683 million head, down 0.5% versus last year and down 2.96% compared to the average from 2009 to 2013. This is the third smallest marketings for September and, once agin, is indicative of the tight supplies of available cattle to market. Pre-report expectations called for marketings to come in at a 0.5% year-over-year drop, so the reported value was right in-line with this averaged expectation.

The total number of cattle in feedlots with 1,000 head or larger capacity totaled 10.058 million head, down 0.5% versus October 2013 and 6.3% lower than the five-year average.  The number of cattle on feed was close to pre-report expectations that looked for a 0.3% decline.

The October report each year provides the quarterly inventory of cattle by classification. Of the 10.058 million head, 6.460 million were steers (64%), 3.547 million were heifers (35%), and 51,000 were cows and bulls (0.5%). Of course, everyone was waiting for the number of heifers in the feedlot to get a feel for expansion. This October 1 reading was 3.1% lower than last year and 1.5% lower than the July 1, 2014 inventory. These are comparatively different from the number of steers on feed — down 0.8% from last year and even with July — so, it appears that heifers are being held back. An additional story line to this number is that feedlots are reportedly feeding some of these heifers with the intention of selling them as replacements, so the expansion numbers could be even larger than this report is showing.

The report will most likely be viewed as bullish, but it is hard to make a call on how the market will react. Previous reaction to these monthly numbers has typically not followed expectations, as outside market forces have led the day. With equities on a very roller coaster ride this may well be the case Monday.

A break down on the numbers can be found at this link: http://goo.gl/1M4YXv

Cattle Market Notes: Week Ending Oct 17, 2014

Cash Cattle:

Cash fed cattle prices were steady this week. The five-area live and dressed steer prices were $163.74 and $257.75, respectively, up $0.20 and down $0.04. In Kansas and Texas, live cattle traded steady at $164 on Wednesday. Also on Wednesday, live and dressed cattle sold at $164-$165 and $258 in Nebraska. Western Cornbelt cattle sold at $163-$165 and $258, respectively for live and dressed.

Most reported Mississippi calf and feeder prices were mixed this week. Steer calf prices were mixed with low five weights being up $15, but the remaining weight groups were mostly steady to $10 lower. Heifers were also mixed, ranging from $5 higher for four weights, steady for six weights, and five and seven weights were $2.50-$5.00 lower. Cull cows were steady and bulls were $5 lower. Feeder steers and heifers in Oklahoma City were steady to $3 lower. Steer and heifer calves were steady to $5 higher.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Feeder futures were sharply lower to the end the week. All contracts were down $2-$5, with the nearby October 2014 contract suffering the least and all other contract months being closer to the negative $5 mark. Live cattle futures were off less than $1 for the two remaining 2014 contracts. February 2015 live cattle were down $1.43 versus last Friday, while more deferred contracts were down more than $3. Sour economic news (weak September retail sales) plagued markets mid-week driving equity markets lower with demand dependent commodities riding on those coattails. Home building data and consumer sentiment closed the week on a positive note but not enough to overcome the early mid-week declines.

Corn futures ended the week higher. The previous week had grains building steam before being steam-rolled by the supply and demand report. This week brought some corrective bidding pushing prices higher. Grains held off the general market declines better than meats.

Beef:

Wholesale Choice boxed beef prices moved higher until mid-week and then slipped back just a bit, while Select boxes drifted lower each day but still ended higher week-over-week. Choice boxes averaged $249.26, up $4.00. Select boxes ended the week at an average of $235.53, up $2.43.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

October Cotton Market Update

Friday’s Crop Production and World Agricultural Supply and Demand Estimates reports from USDA revealed a smaller crop is expected. Total U.S. production is forecasted at 16.255 million bales, down 283,000 from September. This is due to a drop in yield to 790 pounds per acre, down from 803 last month. Mississippi’s yield and production estimates were increased, though, to 1,154 pounds per acre yield (compared to 1,120 last month) and production of 1.010 million bales (980,000 projected last month).

Cotton use was unchanged from last month with total projected use at 13.80 million bales. Domestic demand remains at 3.80 million bales and exports are projected at 10.00 million. It is clear that USDA will not make any bold assumptions on U.S. cotton exports based on China’s waffling import/export polices.

The smaller production level took 300,000 bales off the ending stocks line leaving the amount of cotton expected to be held in inventory at 4.90 million bales, or 35.5% of total use. Projected farm price was lowered to an average of 60 cents per pound, reflecting recent market conditions.

Globally, production was increased to 119.37 million bales, up 1.36, with India’s production accounting for the bulk of the increase (31 million bales, up 1 million). Global use was raised 1.56 million bales to 113.68. Global ending stocks were incased 82,000 bales to 107.11 million.

Nearby December took the report in stride and was up 16 points on Friday. More deferred contracts were lower though. The smaller crop appears to impact the December harvest contract. However, the uncertainty with regard to exports (due to both China’s actions and a stronger dollar value) is adding pressure to contract prices beyond harvest.

Cattle Market Notes: Week Ending Oct 10, 2014

Cash Cattle:

Cash fed cattle prices were higher on the week. The five-area live and dressed steer prices were $163.54 and $257.79, respectively, up $2.95 and $2.88. In Kansas and Texas, live cattle traded at $164 on Thursday. Live and dressed cattle sold at $165 and $258 in Nebraska. Western Cornbelt cattle sold at $163-$164 and $258, respectively for live and dressed.

Reported Mississippi calf and feeder prices were higher this week. Steer calf prices were mostly $7-$15 higher and feeder steers were $6-$15 higher. Heifers were $5-$8 higher. Cull cows, on the other hand, were $5 lower, while bulls were steady to $2 higher. Feeder steers and heifers in Oklahoma City were $5-$7 higher. Steer calves were $7-$15 higher and heifer calves were steady to $2 higher.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Feeder futures moved higher through the middle of the week, with the nearby October topping out at $245.20 early on Thursday, before falling back. Live cattle moved in similar fashion. Higher boxed beef and strength in the cash market provided the catalyst. As the week closed out, Wall Street applied the brakes with a dismal showing all week except for Wednesday. USDA released their monthly supply and demand estimates on Friday (Oct 10). The report revealed an increase in expected beef consumption for 2014 and 2015, pushing per capita consumption up 0.2 and 0.3 pounds per person, respectively to 54.1 and 52.4. Beef production was also increased for 2014 and 2015 (currently projected at 24.759 and 23.790 billion pounds), while pork and broiler production were only increased in 2015.

Corn futures ended the week 11-12 cents per bushel higher. The week was providing quite a lift as prices moved about 20 cents higher. However, Friday’s supply and demand report, as well as the Crop Production report, removed about half of the week’s gains. The reports showed that the national yield is expected to be 174.2 bushels per acre, up 2.5 from last month, which would push the crop to 14.475 billion bushels. There were only limited changes on the demand side, feed use was raised 50 million bushels, and that left the amount of corn to be carried into the next marketing year at 2.081 billion bushels, up 79 million from last month’s projection.

Beef:

Wholesale Choice boxed beef prices moved higher this week. Choice boxes averaged $245.26, up $7.07. Select boxes ended the week at an average of $233.10, up $6.27.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

Cattle Market Notes: Week Ending Oct 03, 2014

It was this time of the year, one year ago, that the government came to a screeching halt. USDA, as a governmental agency, closed it’s doors and websites and left us all without any price information. I was lambasting the move as potentially market moving, but in the end no big issues were seen in cattle markets, and surprisingly things worked out.

Cash Cattle:

Cash fed cattle prices were higher this week. The five-area live and dressed steer prices were $159.98 and $252, respectively, up $6.86 and $10. Once again, negotiated cash trading was too thin through Friday for any prices to be called. However, a few sales were reported at $158-$162 across parts of the feeding region. For an insightful perspective on the dwindling negotiated trade CLICK HERE.

Reported Mississippi steer calf prices were mostly $5 higher and feeder steers were $5-$10 higher. Heifers were $5-$8 higher. Cull cows were $5 higher and bulls were $4 lower. Feeder steers and heifers in Oklahoma City were $2-$6 higher while calves were steady to $6 higher.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

{Insert weekly comment about the record-setting, remarkable market here!} The previous comment is meant mostly in jest, but as they say, there is always some truth in every joke. Once again, the cattle futures market was impressive, specifically feeder futures. Feeder cattle contracts ended the week with the two front months (Oct and Nov) finishing above $240! We all know supplies are tight, but the other side of the equation, demand, has been resilient. This week the National Restaurant Association survey came back with improved conditions for owners/mangers. Also, on Friday, the U.S. Labor Department reported that 248,000 jobs were added in September (and also revised July and August higher). This was ahead of market expectations and provided a short lived boost to equities and futures. These point to further improvement in beef demand. On the other hand, the U.S. dollar strengthened more this week, which could dampen exports as we close out the year.

Corn futures ended the week about even with last Friday’s close. USDA-NASS released their quarterly Grain Stocks report on Tuesday (Sep 30). The total amount of corn in bins across the U.S.on Sept. 1, 2014 totaled 1.236 billion bushels compared with 1.185 billio bushels that had been expected but much more than the 821 on hand the same time last year. The big shock came in the soybean stocks number. USDA reported 92 million bushels in storage, lower than the 126 million that was expected. For more on the report CLICK HERE.

Beef:

Wholesale Choice boxed beef prices moved lower again this week. Choice boxes averaged $238.19, down $1.43. Select boxes ended the week at an average of $226.83, up $0.25.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

2014 Farm Bill – Important Sign Up Dates

Dates associated with Cotton Transition Assistance Program (CTAP), Agricultural Risk Coverage (ARC) program and Price Loss Coverage (PLC) program that farm owners and producers need to know:

Aug. 11, 2014 through Oct. 7, 2014: Producers can enroll in CTAP at their local Farm Service Agency office.

Sept. 29, 2014 to Feb. 27, 2015: Land owners may visit their local Farm Service Agency office to update yield history and/or reallocate base acres.

Nov. 17, 2014 to March 31, 2015: Producers make a one-time election of either ARC or PLC for the 2014 through 2018 crop years.

Mid-April 2015 through summer 2015: Producers sign contracts for 2014 and 2015 crop years