Cattle Market Notes Week Ending May 5, 2017

Cattle Quick Thoughts

Feeder cattle futures prices for the fall hit the high 150’s on Thursday. The October contract even touched $160 before giving it all back that afternoon. The October contract closed the week at $148.78. While down $4 from last week, this is still nearly $18 higher than a month ago. This latest rally in the futures markets should have us thinking about risk management. This is a time to give serious consideration to price protection strategies for fall calves. Futures contracts, options, or sales for future delivery should all be explored as tools to take advantage of the current price levels.

Cash Cattle:

Cash traded fed cattle continue to rally due to strong demand for tight supplies of fat cattle. Fed steers were up $8.44 to an average of $144.69 for live sales. This is the third largest weekly increase over the past 15 years. Dressed steers were up $13.05 to an average of $229.86. Fed cattle trade volume was 138,000 head through Thursday.

Feeder cash prices surged this week in Mississippi. Mississippi feeder steers weighing 450-500 pounds were up $6 this week to average $161.50 while 750-800 pound steers were up $8 to $137. Average feeder prices in Oklahoma City for 500-550 pound steers were down $6.23 to $166.78 while OKC 750-800 pound steers were down $5.86 from last week to $135.88.

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Futures:

June live cattle were up $4.23 to $128.30 while August live cattle were up $1.30 to $121.18. Feeder cattle futures closed lower despite large mid-week spikes. May feeder cattle were down $4.70 to $143.78 while August feeder futures were down $0.15 on the week to $153.43. Corn futures prices were up this week with May and July futures up 5 and 6 cents to $3.62 and $3.71, respectively.

Beef:                                                                                           

Wholesale boxed beef prices surged higher this week. Exports continue to boom and retailers are demanding beef as Memorial day looms. Choice boxes averaged $232.55, up $12.99 from a week ago. Select boxes ended the week at an average of $214.81, up $8.68 from last week. The choice-select spread was $17.74, up $8.68 from last week.

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

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