Retai diesel prices dropped slightly by two cents across the US to hit $2.42, bringing the 27-day average price to $2.63. The largest falls were in the Midwest, Gulf Coast and West Coast regions with three cent falls. Only the New England region saw no change.
The highest retail diesel prices are in the West Coast region at $2.62, while the smallest are in the Gulf Coast region at $2.25.
Last week Dr. Brooks broke down the most recent USDA Cattle on Feed report noting how estimates overall were in line with pre-release expectations. Given the lack of surprises in this report, it is useful to re-examine the most recent estimates of closeouts offered in K-State’s Kansas Feedlot Net Return series to extend understanding of the current situation faced by feedlots.
Grain and oilseed futures were higher Tuesday morning after the Renewable Fuel Standards were raised by the EPA Monday afternoon. The total renewable fuels mandate was set at 18.11 billion gallons, while the ethanol mandate was raised 500 million gallons to 14.5 billion gallons, boosting corn futures. Still, lagging export inspections and better than expected U.S. production could limit the upside. Argentina plans to abolish the 20% corn export tax on Dec 10, 2015, the first day the new regime takes office. The dollar was a bit lower yet still remains above 100.0.
The weekend took a turn down for livestock prices. Live cattle prices saw a $1.78 drop on Monday to hit $130.05. The 27-day average price now rests at $133.90. Feeder cattle prices fell from $166.03 on Friday to $162.75 on Monday, bringing the 27-day average price to $177.76.
Lean hog prices also fell 30 cents over the weekend to hit $58.43, bringing the 28-day average price to $57.39.
Corn and wheat saw opposite reactions over the weekend. Corn increased six cents, while wheat saw a six cent fall.
Choice boxed beef prices saw a slight increase of 61 cents on Monday to hit $205.59. The 27-day average price now rests at $213.27. Select boxed beef prices also jumped over the weekend from $195.67 on Friday to $196.16 on Monday, bringing the 27-day average price to $203.86.
Cattle carcass weights are at record levels and continue to increase counterseasonally. As of the week ending October 24th, average steer weights were reported at 927 pounds (+3 percent year over year) and average heifer weights at 841 pounds (+2 percent year over year). Several factors have contributed to the rapid increases in cattle weight gain. First, the costs of feeding cattle have become considerably lower and there is excess capacity in the feeding sector.
Compared to last week, feeder cattle and calf markets were not fully tested due to limited marketing during the Thanksgiving Holiday week. Several major auctions held specials on Monday and Tuesday this week with calves trading mostly steady to 10.00 higher with some instances 15.00 higher on light weight calves under 500 lbs. Yearlings sold steady to 4.00 higher on a light test. Direct trade on a light test was steady to firm with instances 3.00 higher. Demand was high at Green City, MO on Tuesday for their annual Thanksgiving Yearling Special with over 3800 head of top quality yearlings on offer.