Cattle Market Notes: Week Ending Apr 24, 2015

Cash Cattle:

Cash traded fed cattle finished the week lower. The five-area fed steer price ended the week at $158.91 for live sales, and $252.14 for dressed; respectively, down $3.80 and $3.82. Cash trades in the Southern Plains (TX & KS) were reported at $158 live on Wednesday. Nebraska trades ranged from $253 early to $260 later in the week, dressed, while live sales came in at $160-$160.50 on Thursday. Western Cornbelt trade was $158-$160, live, and $250-$260, dressed, rising as the week progressed.

Feeder cattle were lower and calf prices were mostly steady this week. In Mississippi auction markets, feeder steers were $5-$15 lower and steer calves were $7 to $20 lower. Heifers in Mississippi were steady to $15 lower. Oklahoma City feeder steers and heifers sold steady to $4 lower, while calves were steady.

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

Futures:

Cattle futures ended the week higher by the end of the week, when compared to last Friday’s close. The week started in a dismal way as the steep losses from last Friday carried into the early week trade. Reports of strong international beef trade (coupled with a weaker U.S. dollar) helped push prices higher. Most notably, though, continued reports of Avian Influenza H5N2 (bird flu) hit the headlines early in the week as outbreaks in Iowa and Minnesota were reported. This has a two fold gain for beef markets. Consumer concerns of food safety could shift purchases to beef and the potential supply shock may increase broiler prices longer term. … Look for this exuberance to be squashed as markets open Monday. Friday afternoon (after futures markets closed) the USDA, NASS released their monthly Cattle on Feed report. The report was quite bearish as feedlot placements during March soared, much higher than anyone anticipated. This left feedlot inventories higher as well. The bulk of the gains in feeder placement stemmed from heavy weight placements, so look for near term live cattle futures to be most pressured, but all cattle futures will likely suffer. For more on the report, CLICK HERE.

Corn futures were lower this week. Early week support was noticed following the release of USDA’s weekly Crop Progress report. Southeastern states are lagging in getting the crop planted (most notably Missouri and Kentucky — if you want to consider MO a “southeastern state”!). Northern and Eastern Cornbelt states are still in decent shape with planting progress. Prices dropped on Thursday and Friday with many grain market analysts attributing the drop to bird flu’s potential to reduce feed demand.

Beef:

Wholesale boxed beef prices were mostly steady but the spread between Choice and Select carcasses did push a tad higher. Choice boxes averaged $259.20, up $0.18. Select boxes ended the week with an average of $249.99, down $0.36.

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

April Cattle on Feed Report Recap

** Updated Sunday, April 26 **

The United States Department of Agriculture’s National Agricultural Statistics Service (USDA, NASS) released their monthly Cattle on Feed report Friday afternoon (Apr 24). The report revealed that 10.797 million head of cattle were in U.S. feedlots with a capacity of 1,000 head or larger on April 1, 2015. Placements into feedlots during the month of March totaled 1.089 million head while marketings during the same month totaled 1.631 million head.

[ … For detailed numbers and charts CLICK HERE … ]

Placements totaled 1.809 million head, an increase of 0.44% from March 2014 but a 2.18% decrease from the five-year average of 2010 to 2014. Market analyst expected placements to come in at 1.722 million head, so the reported value was much higher than anticipated — even above the highest guess by 2.7 percentage points. The jump in placements stemmed from heavy weights, though, as total placements of cattle over 800 pounds increased 16.1%, while all other weight groups saw decreases (nationally). Kansas and the aggregate of those states that are not reported individually were the only to report increases outside of this weight group. The significant increase in heavy weight cattle will surely pressure live cattle futures prices with mid/late summer delivery.

Cattle marketed in February totaled 1.631 million head, down 1.75% versus last year and down 11.31% compared to the average from 2010 to 2014. Pre-report expectations called for marketings to be 1.9% lower than the same period last year.

The total number of cattle in feedlots with 1,000 head or larger capacity totaled 10.797 million head, up 0.05% versus April 1, 2014 but 2.20% lower than the five-year average.  Market analysts expected a 1.0% year-over-year decrease in cattle inventories.

Also inside this report was the quarterly breakdown of cattle on feed by class. A large increase in steers was reported (up 5% year-over-year), while heifers on feed were down by a rather large clip (down 10% year-over-year). The figure below shows the placements of steers and heifers compared to prior years. Not surprisingly, this adds further evidence of increased heifer retention and herd building.

Screen Shot 2015-04-24 at 5.13.17 PM

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

Cattle Market Notes: Week Ending Apr 17, 2015

Cash Cattle:

Cash traded fed cattle finished the week steady to lower. The five-area fed steer price ended the week at $162.71 for live sales, and $255.96 for dressed; respectively, down $0.42 and $8.05. Concerns continue to mount of cash trade volume. Very few cattle traded hands in the “true” cash market (i.e., for delivery in the near term). Most reported cash transactions are for delivery three weeks from now.

Calf and feeder prices were mostly lower. In Mississippi auction markets, feeder steers were steady to $7 lower and steer calves were $7 to $20 lower. Heifers in Mississippi were steady to $7 lower. Oklahoma City feeder steers and heifers sold steady to $5 lower, while calves were steady.

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

Futures:

Cattle futures ended the week on par with last Friday’s close, but that was not without some drama. Volatility is theme this week, and to be honest, traders like volatility. The week ended, once again, with steep losses on Friday. European concerns peaked as Greece appears near default. This coupled with, at best, neutral economic news from the U.S. put all equities and commodities at a loss. Higher boxed beef prices helped, but increases in oil prices brought on fears of a pinched budget for John and Jane Consumer. On the bright side, beef exports are on pace for a solid year of gains.

Corn futures were mostly steady this week.

Beef:

Wholesale boxed beef prices were higher. Choice boxes averaged $259.02, up $1.52. Select boxes ended the week with an average of $250.35, down $0.89.

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 Apr 10, 2015

Cash Cattle:

Cash traded fed cattle finished the week lower. The five-area fed steer price ended the week at $163.13 for live sales, and $264.01 for dressed; respectively, down $3.54 and $0.71. Kansas traded at $163, live, on Friday, while in Nebraska cattle sold at $256-$263 dressed.

In Mississippi auction markets, feeders were steady to slightly higher and calves were mostly steady.  Oklahoma City feeder steers and heifers sold steady to $3 higher, while calves were steady to $2 higher.

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

Futures:

Feeder futures closed Friday with steep losses, which brought an end to a fairly rough week. When compared to last week’s holiday shortened Thursday close, feeder futures were generally lower by $7. Live cattle futures ended this week down about $2.50-$4.50. The lower cash trade for fed cattle pressured futures markets. The overall lack of cash traded cattle continues to be a concern in the marketplace, but traders have no where else to look from a price discovery perspective and this will likely not let up for the foreseeable future.

Corn futures shed about $0.10 this week.

Beef:

Wholesale boxed beef prices were higher. Choice boxes averaged $257.50, up $2.95. Select boxes ended the week with an average of $251.24, up $2.00.

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

April Agricultural Supply and Demand Estimates

The United States Department of Agriculture’s Office of the Chief Economist (with collaboration from a number of USDA agencies) released their monthly World Agricultural Supply and Demand Estimates report today (April 9). At this stage the reports do not carry the level of excitement that we will get next month. By now, information pertaining to last year’s crop is largely under control so typically there are few changes. Last week’s Grain Stocks report also provided guidance on the degree of consumption for most crops. However, next month’s report will be the first to gauge the upcoming crop year with subjective forecasts of yields, supplies, and demand being released.

This month’s report was largely unchanged. The corn ending stocks estimate totaled 1.827 billion bushels, up 50 million compared to the March estimate. The change stems from corn inventories reported in the March 31 Grain Stocks report. Corn used for feed was down 50 million bushels. All other domestic corn estimates were unchanged.

Estimated soybean seed and residual use was larger by six and 14 million bushels, respectively, again resulting from the recent inventory update. Soybean imports were increased by five million bushels leaving ending stocks at 370 million bushels, down 15 million.

Domestic cotton ending stocks increased by 200,000 bales to 4.4 million. U.S. cotton yield for the 2014 growing season was raised to 806 pounds per acre, up from 795 projected last month. This changed stemmed from the Cotton Ginnings report. This pushed total 2014 production up to 16.3 million bales, up 220,000 (for those who pulled out their calculators, the 20,000 bale difference is swept into an “unaccounted” category).

U.S. Rice ending stocks estimates were raised to 42.4 million hundredweight, up 1.5 million. Imports increased 500,000 hundredweight, while domestic use and exports both fell by one million each.

Globally, corn ending stocks increased 3.18 million metric tons, with roughly 40% of the change coming from the higher U.S. stocks. Argentina’s stocks fell slightly, while Brazil’s were mostly flat. Soybean ending stocks across the world were mostly unchanged from the March report. Argentinian ending stocks were up one million metric tons and Brazil’s soybean stocks were unchanged. Global rice stocks were up almost one million metric tons, with about half of that stemming from the U.S. Finally, after continued growth in cotton stocks, this month’s estimate has global cotton ending stocks mostly steady compared to the March report (China holds 59.2% of all global ending stocks).

Crop Acreage Expectations and Grain Stocks

Earlier this week USDA released their annual Prospective Plantings report and their quarterly Grain Stocks report (both on Tuesday, March 31). The Prospective Plantings report uses the results of producer surveys from late February through early March to set the tone for the acreage allocation of various crops in each state (and the nation). The stocks report summarizes the level of grain inventories in terminal elevators and on farm grain bins.

The plantings report revealed that U.S. producers intend to plant 89.199 million acres of corn this summer, 84.635 million acres of soybeans, and 9.549 million acres of cotton. In Mississippi, growers plan to plant 570,000 acres of corn, 2.3 million acres of beans, and 350,000 acres of cotton. Market expectations looked for fewer corn acres and more bean acres. This resulted in a sharp drop in corn prices following the release of the report.

More on the report as it relates to Mississippi can be found HERE.

Supplies of corn and soybeans were in-line with expectations, but interestingly on-farm storage continues to point toward farmer hoarding. Corn held on-farms was up 13% versus last March and soybeans stocks on-farms was up 60%! Keep in mind, that at some point these bushels will need to be sold.

Cattle Market Notes (Condensed Version): Week Ending Apr 02, 2014

Futures and equity markets will be closed tomorrow for the Good Friday holiday, as will USDA offices, thus this week’s market notes will be short. — Happy Easter to everyone, John Michael

Thursday’s five-area steer price came in at $166.73, up $2.73 compared to last Thursday’s price. Dressed steers were reported at $262, up $2.00.

Feeder steers and heifers in Oklahoma City held steady early this week, while calves were firm to $3 higher.

Feeder steers and heifers in Mississippi were weaker compared to last week on Wednesday. Monday’s and Tuesday’s sales seemed to be a tad higher.

Feeder futures have remained fairly steady this week. A slight drop was seen on Wednesday due to overall weakness in commodity and equity markets. Live cattle futures have been on a similar path.

Corn futures rallied through a bearish report. Markets were quite volatile on Tuesday with the release of the highly anticipated annual Prospective Plantings report, as well as the quarterly Grain Stocks report. The first revealed that U.S. producers intend to plant 89.199 million acres of corn this summer, 84.635 million acres of soybeans, and 9.549 million acres of cotton. In Mississippi, growers plan to plant 570,000 acres of corn, 2.3 million acres of beans, and 350,000 acres of cotton. Market expectations looked for fewer corn acres and more bean acres. This resulted in a sharp drop in corn prices following the release of the report. From the latter report, stocks of corn and soybeans were in-line with expectations, but interestingly on-farm storage continues to point toward farmer hoarding. Corn held on-farms was up 13% versus last March and soybeans stocks on-farms was up 60%! Keep in mind, that at some point these bushels will need to be sold.

Beef prices moved higher on Tuesday and the current five day average price (Mar 26-Apr 01) for Choice and Select is, respectively, $252.54 and $248.03 both up from this past Friday’s average.