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Cattle Market Weekly Audio Report for Oct. 19, 2019

Steers and heifers steady to higher; declining supply of yearling cattle

Price strength continued to diverge this week between the declining supply of yearling cattle and the blossoming number of un-weaned calves starting to come to town.

Overall, yearling steers and heifers sold steady to $4 per cwt higher, according to the Agricultural Marketing Service (AMS). Calves traded from $3 lower to $4 higher.

“Bawling calves seem to be finding the most variable demand and it’s very dependent on buyer views of how much or little health risk,” say AMS analysts. “Discounts for those calves without shots or legitimate weaning programs are severe.”

Stronger cash prices the previous week helped boost Cattle futures to start this week. Futures softened late in the week, amid overbought conditions, higher Corn futures and wariness over an explosion at a building adjacent to Cargill’s beef packing facility in Dodge City. That facility never shut down completely and is expected to be back up to speed by early in the coming week.

Through the front three contracts, Feeder Cattle closed $1.01 lower week to week on Friday. They were 30 cents lower to 37 cents higher across the rest of the board. Feeder Cattle lost an average of $2.25 in the last two sessions.

Although regional average prices were higher, based on the National Weekly Feeder and Stocker Cattle Summary, Andrew P. Griffith, agricultural economist at the University of Tennessee, expects seasonal price pressure to prevail.

The market in its entirety is continuing to trudge through soft market prices and seasonally soft demand. The market is unlikely to find significant support until December or after the first of the year,” Griffith says in his weekly market comments.

One potential wild card, according to USDA’s Economic Research Service (ERS), revolves around atypical calf marketing and feedlot placements coming into the fall.

“Warmer than expected weather patterns and improved supplies of forage may have extended cattle grazing periods, slowing the pace of placements in third-quarter 2019,” say ERS analysts in the latest monthly Livestock, Dairy and Poultry Outlook. “However, some of these feeder cattle will likely need to be moved off grass and into the feedlots in fourth-quarter 2019, keeping feeder prices under pressure.”

Based on recent price strength, though, ERS increased the average expected feeder steer price in the fourth quarter by $4 to $137 per cwt. The annual price forecast for feeder steers next year was unchanged at $141. That’s for steers weighing 750-800 pounds, basis Oklahoma City.

Negotiated cash fed cattle trade through Friday afternoon was shaping up mostly steady to higher, based on USDA reports. Live prices in the Southern Plains were steady to $1 lower at $108 per cwt.

Prices were steady to $1 higher in the North at mostly $110 in the western Corn Belt and at $109-$111 in Nebraska, but too few to trend in the latter region. Dressed sales were $1-$3 higher in Nebraska at $173-$175. They were mostly $1 higher in the western Corn Belt at mostly $173.

Live Cattle futures extended gains, closing an average of 71 cents higher week to week on Friday (27 cents higher to $1.47 higher in spot Oct). And that was with being down an average of $1.10 in the last two sessions.

Support included recently resurgent wholesale beef values. Choice boxed beef cutout value was $2.48 higher week to week on Friday at $218.04 per cwt. Select was $4.36 higher at $193.04.

Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, October 19, 2019.

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