Cattle Market Weekly Audio Report for Saturday, Sept. 22, 2018

Improving fall forage conditions and promising wheat pasture prospects helped boost calf and feeder cattle prices this week

Steers sold $1-$6 per cwt higher, according to the Agricultural Marketing Service (AMS). Heifers traded mostly steady to $3 higher, except for $4-$6 higher in the North Central region

“Long strings of yearlings are still making their way to market in the Northern Plains, as the grass has been abundant and producers have been content to watch their inventory increase in value,” say AMS analysts. “Buyers were willing to bid up to meet their procurement needs and get pens filled ahead of corn harvest.”

“Feeder cattle prices have shown strength through the summer, but seasonal pressures will likely take hold, moving prices lower in the fourth quarter,” say analysts with USDA’s Economic Research Service (ERS), in the latest monthly Livestock, Dairy and Poultry Outlook (LDPO). “Prices typically decrease when the spring-born calves (about two-thirds of the annual calf crop) are brought to market in the fall. Assuming normal weather in the Great Plains, availability of winter forages for backgrounding could bolster prices in fourth-quarter 2018 (see “Stocker opportunity looks positive”).”

ERS nudged projected feeder cattle prices slightly higher for the rest of this year and next, compared to the previous month at $148-$151/cwt. in the third quarter; $143-$151 in the fourth quarter; $139-$151 for the 2019 annual price, based on lower projected corn prices.

Cattle futures were able to retain most of the pervious week’s trench-busting gains, helped along by expanding open interest.

Feeder Cattle futures closed an average of 37¢lower week to week on Friday.

Live Cattle futures closed mixed from an average of 32¢ lower to an average of 25¢higher.

Heading into the new week, futures will likely face some pressure from Friday’s monthly Cattle on Feed report (see below).

Fed cattle trade mainly steady

Negotiated cash fed cattle trade was a sluggish affair, remaining mostly undefined through late Friday afternoon. Live trade was reported in Nebraska at $110.00-$110.50 per cwt, which was $1 lower than the previous week. Dressed trade was steady at $175

Similarly, late Friday, the Texas Cattle Feeders Association reported its members trading cattle at steady money of $111.

Speaking to fed cattle prices in the second half of this year, ERS analysts say, “Feedlots seem to have resisted recent lower prices from packers, which may be reflected in a greater proportion of cattle on feed over 120 days. To the extent these cattle are remaining on feed longer as producers respond to the prospects of higher future prices, there could be a shift of some marketings from the third quarter to the fourth.”

Projected fed cattle prices (5-area Direct) in the most recent LDPO are $108-$111 per cwt for the third quarter and at $108-$114 for the fourth quarter.

“In the first quarter of 2019, fed cattle prices could be below 2018’s. In subsequent quarters prices are forecast to be similar to a year earlier,” say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor. “A normal 2019 Midwest corn crop would set the stage for steady to modestly higher yearling and calf cattle prices in the second half of 2019, compared to the corresponding quarters in 2018.”

Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, Sept. 22, 2018.

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