Cattle Market Notes Week Ending June 23, 2017

Cattle Quick Thoughts

The May Cattle on Feed Report was released Friday afternoon. Placements continued to outpace last year. May placements into feedlots were up 12 percent or 230,000 head greater than May of last year. Fed cattle marketings were 9 percent higher in May of 2017 than May 2016. The marketings percentage is a little higher due to there being one more slaughter day in May 2017 than in May 2016, though daily average marketings were still higher than last year. Altogether there are three percent more cattle on feed on June 1st of this year than there was June 1st, 2016. Let’s consider what has happened in the first 5 months of 2017. We have placed 825,000 more head of cattle than in the first 5 months of 2016. We have marketed 588,000 more head of cattle than in Jan-May of 2016. The higher marketing rates have been a clear bright spot for the cattle industry as they facilitate movement of cattle through the feeding system. Placements continue to be a major part of the story. There were about one million more calves born in 2016 than in 2015. We are seeing these animals appear as placements this year. The cattle market will continue to depend on the improved beef demand of 2017 to absorb this increase and pull cattle through the system.

Cash Cattle:

Cash traded fed cattle prices were down sharply this week. Fed steers were down $8.72 to an average of $121.51 for live sales through Thursday. Dressed steers were down $16.35 to an average of $193.80.

Feeder cash prices were also lower this week in Mississippi. Mississippi feeder steers weighing 450-500 pounds were down $6 to an average of $151.50 while 750-800 pound steers were down $3.50 to $127.50. Oklahoma City feeder steers weighing 500-550 pounds were down $2.49 to an average of $175.85 while 750-800 pound steers were down $1.91 to $155.09.

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

Futures:

CME was experiencing some type of technical error at the time of this writing. Unfortunately, cattle futures prices are unavailable. I’ll update the Spreadsheet when they become available. Corn futures prices were down 25 cents per bushel this week with July and September at $3.59 and $3.67, respectively.

Beef:                                                                                           

Boxed beef values were also lower this week. Choice boxes averaged $244.90, down $5.96 from a week ago. Select boxes averaged $218.76, down $2.08 from last week. The choice-select spread shrunk to $26.14, down $3.88 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.

Cattle Market Notes Week Ending June 16, 2017

Cattle Quick Thoughts

U.S. beef was shipped to China for the first time in nearly 14 years on Wednesday, June 14th. This followed the release of the final trade details on the preceding Monday. This is an important development for the beef industry and hopefully the starting point to a long-lasting trade agreement that will benefit U.S. cattle producers. There are a few trade details that limit the short-term impact the deal will have on beef exports and will require different production practices than are commonly used. (1) Cattle must be traceable to the U.S. birth farm using a unique identifier. (2) Beef must be uniquely identified until shipment. (3) Beef products exported to China should not contain growth promotants, feed additives and other chemical compounds. Each of these regulations adds cost to beef to become eligible for shipment to China. Currently, a relatively small percentage of beef produced in the U.S. qualifies for shipment to China. The no growth promotants clause is especially at odds with current production practices as most U.S. cattle are given some type of growth promotant. However, when there is demand, supply will follow. As Chinese consumers begin to demand more U.S. beef, purchasing and feeding programs that meet these regulations will develop to provide the supply. This is a long-run gain for the U.S. cattle industry.

Cash Cattle:

Cash traded fed cattle prices were lower through Thursday. Live cattle were down $4.91 to an average of $130.23 while dressed steers were down $9.19 to an average of $210.15.

Feeder cash prices were also down this week in Mississippi. Mississippi feeder steers weighing 450-500 pounds were down $10 to an average of $157.50 while 750-800 pound steers were down $9 to $131. Average feeder prices this week in Oklahoma City were down $3.35 to $178.34 for 500-550 pound steers and down $3.45 to $157 for 750-800 pound steers.

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

Futures:

Similar to cash prices, futures prices were down significantly this week. June live cattle were down $9.50 to $121.85 while August live cattle were down $5.93 to $118.25. August feeder cattle were down $6.30 to $148.20 while September feeder futures were down $6.55 on the week to $147.45. Corn futures prices were lower this week with July and September down 4 and 3 cents to $3.84 and $3.92, respectively.

Beef:                                                                                          

Boxed beef values were up modestly this week. Choice boxes averaged $250.86, up 64 cents from a week ago. Select boxes averaged $220.84, up $1 from last week. The choice-select shrunk slightly to $30.02, down 36 cents from last week.

Cattle Market Notes Week Ending June 9, 2017

Cattle Quick Thoughts

Another scandal in Brazil is sending waves through the global beef industry. JBS, a Brazilian-based company, is the largest meatpacking company in the world and recently admitted to bribing almost 2,000 politicians in Brazil for exchange for government subsidized financing. As a result, the holding company for JBS has agreed to pay $3.1 billion in penalties. Earlier this week, JBS agreed to sell its beef units in Argentina, Uruguay, and Paraguay for $300 million “to reduce its financial leverage.” JBS has since stated that its U.S. holdings are not for sale. It is still unclear what impact this and the food inspection bribery scandal (by multiple companies in Brazil) will have on beef exports from Brazil, the second largest beef exporting country. However, any impact that occurs will likely be negative. There may be opportunities for U.S. beef exports to gain share in some global markets due to these disruptions.

Cash Cattle:

Cash traded fed cattle prices were mixed through Thursday. Live cattle were up $1.12 to an average of $135.14 while dressed steers were up $4.20 to an average of $219.34.

Feeder cash prices were sharply higher this week in Mississippi. Mississippi feeder steers weighing 450-500 pounds were up $8 to an average of $167.50 while 750-800 pound steers were up $8.50 to $140. Average feeder prices this week in Oklahoma City were 181.69 for 500-550 pound steers and 160.45 for 750-800 pound steers. OKC stockyards were closed last week.

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

Futures:

Cattle futures prices were mostly lower this week. June live cattle were up 35 cents to $131.35 while August live cattle were down $2.15 to $124.18. August feeder cattle were $4.93 to $154.50 while September feeder futures were down $4.55 on the week to $154. Corn futures prices were higher this week with July and September up 15 and 16 cents to $3.88 and $3.95, respectively.

Beef:                                                                                           

Boxed beef values were up this week. Choice boxes averaged $250.22, up $4.82 from a week ago. Select boxes averaged $219.84, up $1.61 from last week. The choice-select spread grew to $30.38, up $3.21 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.

Cattle Market Notes Week Ending June 2, 2017

Cattle Quick Thoughts

I received a good question about what the Boxed Beef Cutout Value (BBCOV) represents at the MS/LA Beef Field Day a few weeks ago. The BBCOV is reported by the USDA Agricultural Marketing Service and it provides an overall performance indicator for the fabricated beef industry. It is an estimate of the dollars per cwt for a fabricated carcass. It is not an observed price for an entire fabricated carcass sold in boxed form. Rather, the BBCOV estimates the value of a beef carcass based on prices paid for individual beef items from the carcass. Values of primal cuts (i.e. Rib, Chuck, Round, Loin, Brisket, Short Plate, and Flank) are calculated from prices paid for sub primal cuts. The BBCOV is then calculated using the estimated value for each primal and the average industry cutting yields.

Cash Cattle:

Cash traded fed cattle prices were up this week. Fed steers were up $4.67 to an average of $136.26 for live sales through Thursday. Dressed steers were up $6.54 to an average of $215.14.

Feeder cash prices were mixed this week in Mississippi. Mississippi feeder steers weighing 450-500 pounds were up $2 to an average of $159.50 while 750-800 pound steers were down $1 to $131.50. The Oklahoma National Stockyards were closed this week for Memorial Day.

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

Futures:

Cattle futures prices showed impressive gains this week including a surge on Thursday and Friday. June live cattle were up $8.38 to $131 while August live cattle were up $7.45 to $126.33. August feeder cattle were up $12.23 to $159.43 while September feeder futures were up $11.45 on the week to $158.55. Corn futures prices were down slightly this week with July and September each a penny lower to $3.72 and $3.80, respectively.

Beef:                                                                                          

Boxed beef values were slightly lower this week. Choice boxes averaged $245.40, down 88 cents from a week ago. Select boxes averaged $218.23, down $1.98 from last week. The choice-select spread grew to $27.17, up $1.10 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.