Cattle Market Notes: Cash Prices Improve, Weather Is The Factor For Corn
10/31/2009 04:06PM
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Further improvement in cash fed cattle prices continued this week. Trade was light for negotiated cash cattle. Texas and Kansas sales were $1 to $2.50 higher at $88 live in Texas and $87.50 live in Kansas. Dressed sales in Nebraska were at $135 and live at $86 which was called steady to $3 higher. In Colorado prices were $88 live. According to reports feedlots are full with cattle that are not quite ready to list, thus the lower number of cash sales this week. Overall, though, estimated slaughter was higher than last week at 651,000 head compared to 646,000 the week prior and 638,000 last year. Hog slaughter was down a bit from last week estimated at 2.294 million head versus 2.328 million last week and 2.386 million last year.
Feeder cattle markets were mixed, with the outcome largely depending on when in the week cattle were sold. The week started on a weak note with Monday sales at Oklahoma City reporting mostly steady to lower prices. As the week wrapped up prices were mostly steady to higher following lower corn prices and improvements in fed cattle. At Oklahoma City, feeder steers were steady; steer calves were steady to $2 lower and all heifers were steady to $2 lower. In Lexington, KY steer and heifer calves were steady to $2 higher while not enough feeders were sold to establish a trend. At West Plains, MO, yearling steers and heifers over 750 pounds were $2 to $3 higher. Steer calves between 400 and 500 pounds were steady; 500 to 750 pounds were steady $2 higher. Heifers under 750 were mostly steady. In Arkansas markets cattle were mostly uneven with prices generally steady to $2 higher. In Georgia, feeder steers were $1 to $2 higher; heifers were steady; steer calves were steady to $1 lower and heifer calves were steady $2 lower.
In Mississippi markets this week, all classes were $1 to $3 higher. Prices for steers (medium and large, 1-2) at Mississippi auctions throughout the week were as follows: 250-300 pounds, $110-$120; 300-350 pounds, $105-$117; 350-400 pounds, $100-$105; 400-450 pounds, $95-$105; 450-500 pounds $91-$95; 500-600 pounds $85-$97; 600-650 pounds $80-$89; 650-700 pounds, $75-$80; 700-800 pounds $72-$77. Slaughter cows and bulls were $1 to $2 lower. For the week cows brought $37-$46 for boning cows (850-1,200 lbs) and $35-$43 for lean (850-1,200 lbs).
Despite improvements in cash cattle and neutral to higher boxed beef prices, live cattle futures moved lower for most of the week. With the general economy taking a few steps back and the dollar making up some ground versus other currencies too many questions still exist fundamentally for a rally to have any long term hold. On Thursday, positive news surfaced that third quarter gross domestic product not only rose, but rose more than analyst expected. Then on Friday it was shown that consumer spending decreased by 0.5% during September which is not a good sign for beef. Live Cattle closing prices on Friday (with the change from last week’s close in parentheses): December $85.68 (-1.75); February $86.80 (-0.98); April $88.75 (-0.75); June $85.20 (-1.20); August $85.10 (-1.20).
As was the case with live cattle futures, feeder futures moved lower on the week as well. Even with corn taking off most of last week’s gains feeder cattle futures were influenced more by outside markets to finish about $0.75 to $1 lower. Prices were mostly steady through Tuesday due to much lower corn futures prices. Feeder Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: November $94.83 (-0.67); January $95.08 (-0.70); March $95.60 (-1.05); April $96.40 (-1.00); May $97.25 (-0.75).
If you waited until last Friday to book corn you are probably singing the blues this Friday. Weather is still a factor as much of the corn crop is waiting to be harvested – 20% this year as compared to a 58% five year average – but, reportedly, yields still look very favorable. This week, corn was dominated by outside market influence as the dollar rose and oil dropped about $3 on the week. By the week’s end corn erased most of last week’s gains as the December contract closed at $3.65 ½ down 30 ½ cents from last week.
Boxed beef prices were higher again this week, averaging above $140 for the first time since the end of September. Prices began to slip as the week closed out peaking on Wednesday at $141.79 and ending Friday at $140.83. Still, two weeks of higher boxed beef prices is a welcome relief. For the week, the Choice cutout averaged $141.15, up $3.47 from last week’s average. The Select cutout averaged $135.75 this week, up $2.64 from last week’s average.
Source: John Michael Riley and John D. Anderson, Department of Agricultural Economics Mississippi State University