TCR's Weekly Market Summary...
For the week ending February 16, 2018
For the week... All market indicators were higher, and with the time of the year approaching when cutout prices rally, the intermediate term looks bullish. This bullishness is reinforced by a manageable supply of fed cattle in the pipeline combined with supplies of the Choice boxed beef cutout that will remain light over the next month when increased demand normally offsets increasing supplies.
10 Day Market Trendline
Change from Previous Day: -0.76%
Change from 10 Days Ago: -1.98%
Change from 60 Days Ago: +8.21%
60 Day Market Trendline
The Trendlines are indicators of overall cattle/beef market strength and are based on daily market factors.
Each daily factor is the aggregate weighted total of the Gain/(Loss) for 12 market indicators compared to the previous trading day.
Links to Items of Possible Interest:
The views expressed in the content below are included in the WMS because we found them to be of interest but do not necessarily reflect the views of The Cattle Range.
Weekly Market Overview:
National Feeder & Stocker Cattle Weekly Summary:
RECEIPTS: Auctions Direct Video/Internet Total
This Week 238,000 62,900 2,200 303,100
Last Week 224,300 57,700 26,500 308,500
Last Year 257,000 35,200 26,000 318,200
Compared to last week, steers and heifers sold steady to 5.00 higher. Buyers continue to pay up for cattle suitable for summer grazing as they anticipate the supply of those calves get more difficult to find the farther in the new year they get. Demand was quoted as good to very good at most auctions this week as long strings and high quality cattle were on consignments sheets. Last Friday in Fort Pierre, SD a load of 701 lb steers with all the bells and whistles sold at 180.00 and six loads of replacement quality heifers weighing from 772 to 792 lbs sold from 154.00 to 158.50 for a weighted average of 156.69. On Monday at Tri-State Livestock Auction in McCook, NE a string of six loads of 908 lb steers sold at 147.00. Buyers are betting on the come as the drought picture in many states continues to intensify. Even though rainfall totaled from 2 to 6 inches from eastern Texas to Tennessee, the west Texas area is listed in extreme drought conditions again as Amarillo has now passed the 4 month mark of not receiving any measurable amount of precipitation.
Nebraska seems to be in pretty good shape moisture wise as some market reports out there have made reference to some 'tag' evident on consignments at auctions. Colors other than white touch every county in Kansas and Missouri on the drought monitor map which can be viewed at: http://droughtmonitor.unl.edu/CurrentMap.aspx. The CME Cattle complex regained the losses from last week as the front five months of Live contracts were 2.62 to 4.15 higher when compared to last Friday. Likewise for the Feeder Cattle contracts as gains of 3.13 to 4.80 were reported for the week. Feedlot trade was sluggish to develop last week as most sales occurred after reporting agencies closed up shop. However, today packers did not want to take a chance of feedyards not selling as analysts were guessing that their inventory numbers were probably getting a little short with the last couple weeks of February upon them.
On Wednesday the Tama Livestock Auction in IA, top sales of steers and heifers sold above 132.00; making ranchers wonder if the packers are going to chase the feedlot trade or try to keep the price advance to a minimum. Right around the time the CME closed for the week, packers blinked and paid up. Compared to last week, negotiated live sales of slaughter steers and heifers sold 4.00 higher at 130.00 while dressed sales were 5.00 higher at 205.00. Breaking through the 130.00 barrier is a big psychological gain as that price level is the highest since the middle of June 2017. Auction volume this week included 66 percent weighing over 600 lbs and 42 percent heifers.
Weekly sales of Stocker Calves & Feeder Cattle sold via auctions, direct country sales, and video/Internet sales as reported by the UDSA Market News
Five Year Moving Average...
Stocker, Feeder, & Slaughter Steers:
Cattle Futures Summary: Live cattle futures ended the Friday session with most contracts 10 to 40 cents lower, as nearby Feb was 75 cents higher. Feeder cattle futures were 27.5 cents to $1.05 lower. The CME feeder cattle index was down 43 cents on February 8 at $147.59. Wholesale boxed beef values were lower on Friday afternoon. Choice boxes were down $2.01 at $206.52, with Select boxes $1.05 lower at $202.74. The Ch/Se spread had narrowed down to $3.78. Estimated FI week to date cattle slaughter is 591,000 head through Saturday. That was down 20,000 from the previous week on lighter Saturday slaughter, but 12,000 head larger than the same week last year. Cash trade was slow to develop, but some $125-126 trades were popping up late on Friday, with $200 reported in Nebraska.
Commitment of Traders...
Receipts EST: 18,000 Week ago Act: 16,609 Year ago Act: 23,258
Compared to last week, steer calves and yearlings mostly steady. Heifers steady. Trade moderate to active, demand moderate to good. Supply consisted of steers and spayed heifers weighing 300-600 lbs.
Feeder steers: Medium and large 1&2, 300-400 lbs 187.00-200.00; 400-500 lbs 167.00-180.00; 500-600 lbs 147.00-160.00; Medium and large 2&3, 300-400 lbs 177.00-190.00; 400-500 lbs 153.00-170.00; 500-600 lbs 137.00-150.00.
Feeder heifers: Medium and large 1&2, 300-400 lbs 157.00-170.00; 400-500 lbs 147.00-160.00; 500-600 lbs 137.00-150.00.
Selected Auction Reports:
Tulia Livestock Auction - Tulia TX
Receipts: 3050 Last Week: 3299 Year Ago: 2004
Compared to last week: Yearling steers and heifers sold steady to 3.00 lower. Trade remains active as the drought continues and yearlings are having to come off of wheat early.
Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts: 3588 Last Week: 3286 Year Ago: 2278
Compared to last week: Feeder steers mostly steady, feeder heifers steady with instances of 2.00 to 3.00 higher on those less than 700 lbs. Steer and heifer calves too lightly tested last week for a good comparison.
Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts: 3229 Last Week: 3345 Year Ago: 3720
Compared to last week, feeder steers under 500 pounds sold unevenly steady on a light test. Feeder steers 500-650 pounds sold 4.00 to 8.00 higher. Feeder steers 650-800 pounds sold steady to 2.00 higher, and feeder steers over 800 pounds sold 2.00 to 4.00 lower.
Huss Platte Valley Auction - Kearney NE
Receipts: 3652 Last Week: 5314 Year Ago: 4150
Compared to last week, most steers sold fully steady with steers under 600 lbs selling 7.00 higher. Heifers under 550 lbs sold 8.00 higher, 650-750 lbs sold 4.00 to 6.00 higher with all other weights selling steady.
Valentine Livestock Auction Market - Valentine NE
Receipts: 675 Last week: 3495 Last year:0
Todays Bred cow and heifer auction consisted mostly of black and red offering bred to lbw black/red bulls. Several offerings of bred heifers to calve Feb and Mar AI'd for 2 to 3 days and bull breds calving 10 to 45 day.
Denison Wtd Avg Feeder Cattle Auction - Denison IA
No comparison due to no recent sale. Offering of feeder cattle over 600 pounds was 82.1 percent with 43.8 percent steers and 56.2 percent heifers.
El Reno Cattle Narrative - El Reno OK
Receipts Week Ago Year Ago
11,772 12,022 6,701
*** Final report *** Compared to last week: Feeder steers and heifers sold 1.00-2.00 higher with good demand. Steer and heifer calves traded mostly steady, few light weight heifers 1.00 higher.
Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts: 5590 Last Week: 4997 Year Ago: 5321
Compared to last week: Steers under 700 lbs not well compared, over 700 lbs mostly steady to 3.00 lower. Heifers under 600 lbs not well compared, 600-650 lbs unevenly steady, over 650 lbs mostly steady to 4.00 lower.
Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 2349 Week ago: 2672 Year Ago: 1168
Compared to week ago: Steer and heifer calves under 600 lbs steady. 600-900 lb feeder steers and heifers steady to 1.00 lower, instances 2.00 lower; three loads steers over 900 lb 2.00-3.00 higher.
Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts Week Ago Year Ago
4,467 9,324 5,019
***CLOSE*** Compared to last week, steer and heifer calves under 600 lbs 2.00 to 5.00 higher, steers and heifers over 600 lbs steady. Demand good, supply moderate to light.
Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
Receipts: 5281 Last Week: 6692 Year Ago: 2469
Compared to last week: Feeder steers 550-650 lbs steady to 5.00 higher with instances seen of 10.00 higher on 550-600 lbs, 650-900 lbs steady to 5.00 lower. Feeder heifers under 600 lbs mostly 3.00 to 8.00 lower with instances 10.00 lower seen of 10.00 lower at times,
Winter Livestock - La Junta CO...
Receipts: 2194 Last Week: 3410 Year Ago: 2509
Compared with last Tuesday: Steer calves 3.00 to 5.00 higher. Feeder steers under 700 lbs 3.00 to 5.00 higher except for 500 to 600 lbs steady to 1.00 higher, over 700 lbs mostly steady.
Russell Wtd Avg Feeder Cattle Auction - Russell IA
Receipts: 2671 Last Week: 2774 Year Ago: 1983
Compared to the sale last week: Feeder strs mostly 3.00-6.00 higher and feeder hfrs under 600 lbs. mostly 3.00-4.00 higher, feeder hfrs over 600 lbs. mostly 2.00-4.00 lower.
Oklahoma National Stockyards - Oklahoma City, OK
Receipts Week Ago Year Ago
9,442 7,501 6,501
*** Add Close with actual receipts *** Compared to last week: Feeder steers over 800 lbs steady to 3.00 lower; under 800 lbs steady to 1.00 lower. Feeder heifers selling mostly steady.
Cullman Stockyard - Cullman AL
Receipts: 356 Last Week: 923 Year Ago: 429
Compared to last week: Slaughter cows and bulls steady to 2.00 lower. Feeder bulls and steers sold steady to 2.00 lower. Feeder heifers sold 1.00 to 3.00 lower. Replacement cows and pairs sold steady.
Toppenish, WA Livestock Auction - Toppenish WA
Receipts: 2000 Last Week: 1215 Year Ago: 810
Compared to last Thursday at the same market, stocker and feeder cattle firm to 6.00 higher as buyers shrug off negative financial news. Trade very active with very good demand for all classes. Slaughter cows and bulls 1.00-2.00 higher.
Blue Grass South Livestock Market - Stanford KY
Receipts: 122 Last Week: 423 Year Ago: 664
Compared to last Monday:No comparison due to a limited supply because of snow and ice in the area. Feeders-83,Slaughter-33,Replacements-6 Supply included 37 percent over 600 lbs and 31 percent heifers.
Tri-State Livestock Auction Market - McCook NE
Receipts: 2650 Last Week: 4400 Year Ago: 2200
Compared to last week, steers were steady - 8.00 higher and heifers were steady - 10.00 higher. Demand was good on all weights of cattle offered. Steers accounted for 61 percent and heifers 39 percent of the offering today.
Clovis Livestock Auction - Clovis NM
Receipts: 3206 Last Week: 3450 Year Ago: 2345
Compared to last week: Feeder steers under 600 lbs 1.00-3.00 higher; over 600 lbs 7.00 higher though quality more attractive. Compared to last month, no comparison available on Holstein steers due to limited receipts.
Direct Sales of Feeder & Stocker Cattle:
WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 844 Week Ago: 510 Year Ago: 945
Not enough comparable cattle this week for an adequate market trend. Demand was mostly moderate as several feed yards have limited available receiving pens. Most of Nebraska feed yards are experiencing a spring like thaw as temperatures are expected to climb in the 50's late in the week.
AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Compared to last week, Trade inactive, demand light. Trade should resume late next week. Cattle weighing over 600 lbs totaled 0 percent. Heifers totaled 0 percent.
IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts: 0 Last week: 118 Last Year: 0
Compared to the last report: Feeder steers and heifers not tested. Prices based on net weights FOB after a 3 percent shrink or equivalent and 5-10 cent slide on calves and 4-6 cent slide on yearlings from base weights.
Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
This week: 1,750 Last week: 3,247 Last Year: 0
Compared to last week: Not enough comparable current FOB delivered cattle last week for an accurate market trend. Supply included 100 percent over 600 lbs; 75 percent heifers.
Colorado Direct Feeder Cattle Report (Fri)
Receipts: 1,902 Last Week 3,014 Last Year 2,007
Compared to last week: Feeder steers and heifers sold with a 1.00-2.00 lower on limited offerings. Demand remains moderate. Supply consisted of 100 percent over 600 lbs; 51 percent heifers.
Kansas Direct Feeder Cattle Summary (Fri)
Receipts: 1,500 Last Week: 3,791 Last Year: 3,068
Compared with last week: Feeder steers and heifers lightly tested this week. Feeder demand moderate. Weather continues to be very dry in much of the wheat country. Volume includes 100 percent 600 lbs and over.
Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 330 Last Week 128 Last Year: 0
Compared to last week: No trades last week so no trend available. Supply includes 100 percent over 600 lbs and 100 percent heifers. Unless otherwise stated prices are FOB weigh point with a 2-3 percent shrink or equivalent and with a 8-12 cent slide on calves and 4-8 cent slide on yearlings from base weights
New Mexico Feeder Cattle Report (Mon)
Receipts: 2500 Last Week: 2900 Year Ago: 3100
Compared to last week: Current FOB sales of steers and heifers sold steady to firm on limited comparable sales. Trade was moderately active on fairly good demand. Supply consisted of 85 percent steers and 15 percent heifers.
Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts: 390 Last Week: 155 Year Ago: 1,650
Compared to last week: Feeder steers and heifers not well tested but a higher undertone was noted. Demand good. The feeder supply included 100 percent over 600 lbs and 19 percent heifers.
Oklahoma Direct Feeder Cattle (Fri)
Receipts: 9,848 Last Week 2,098 Last Year 3,915
Compared to last week: Feeder steers and heifers lightly tested last week on a Current FOB Basis, however a weak undertone was noted. Receipts this week consisted of 100 percent over 600 lbs and 60 percent heifers.
Texas Direct Feeder Cattle (Fri)
Receipts: 36,700 Last Week: 35,100 Year Ago: 20,500
Compared to last week: Current FOB sales of steers and heifers sold mostly steady to 2.00 lower; except steers weighing over 800 lbs sold steady to firm. Trade was active on good demand. Volume increased for out front sales as future months on the CME gained momentum.
Representative Sales of Cows & Pairs:
Reported by USDA Market News for the week ending February 16th
Replacement Cows: Medium and Large 1-2 1-6 yr old 925-1500 lb cow 4-8 months bred
1000.00-1450.00; 5-10 yr old 1025-1375 lb cow 4-8 months bred 910.00-1260.00 per head.
Pairs: Medium and Large 1-2 1-4 yr old 1000-1025 lb cow w/100-150 lb calf 1125.00-1450.00; 5-10 yr
old 800-1200 lb cow w/125-225 lb calf 910.00-1025.00 per pair.
Oklahoma City, OK:
Replacement Cows: Medium and Large 1-2 3-4 yr old 975-1225 lb cow 5-7 months bred
1050.00-1350.00; 5-10 yr old 1025-1475 lb cow 4-7 months bred 885.00-1135.00 per head.
Pairs: Medium and Large 1-2 4-9 yr old 900-1200 lb cow w/50-100 lb calf 1075.00-1085.00; 5-8 yr old
1175-1500 lb cow, some black, w/50-125 lb calf 1200.00-1360.00 per pair.
Replacement Cows: Medium and Large 1-2: Young to long solid mouth 850-1420 lb cows 3-8 months
bred, 725.00-1175.00, per head; middle aged short solid mouth 850-1300 lb cows 3-8 months bred
510.00-810.00, per head; aged 935-1285 lb cows 3-8 months bred 420.00-700.00, per head. First Calf
Heifers: 800-905 lb cows 3-8 months bred 690.00-900.00, per head.
Cow/Calf Pairs: Medium and Large 1-2: Middle aged pkg 925 lb cows w/125-150 lb calves 1000.00, per
pair; aged indiv 750 lb cow w/125 lb calf 800.00, per pair.
Replacement Cows: Medium and Large 1-2 Young 845-1270 lb cows 3-8 months bred 700.00-1275.00,
per head; middle aged 820-1285 lb cows 3-8 months bred 650.00-950.00, per head; aged 835-1302 lb
cows 3-8 months bred 500.00-785.00, per head. First Calf Heifers: 630-880 lb cows 3-6 months bred
650.00-775.00, per head.
Cow/Calf Pairs: Medium and Large 1-2 Young 750-975 lb cows w/150-300 lb calves 750.00-1060.00, per
pair; middle aged 975-1330 lb cows w/100-225 lb calves 1025.00-1250.00, per pair.
Bred Cows: Medium and Large 1 4-6 yrs 3rd stage 1100-1365 lbs 1600.00-1700.00; short and solid
mouth 3rd stage pkg. 1355 lbs 1110.00. Medium and Large 1-2 2-7 yrs 2nd and 3rd stage 1050-1350 lbs
1075.00-1400.00, 1st stage 1070-1295 lbs 950.00-1010.00; short and solid mouth to aged 2nd and 3rd
stage 1100-1365 lbs 750.00-1000.00. Large 1-2 5-6 yrs 3rd stage couple 1540-1770 lbs
1060.00-1115.00; 7 yrs to aged 3rd stage 1390-1775 lbs 900.00-1175.00. Medium and Large 2 4 yr 1st
stage 950 lb indiv. 925.00. Medium 1-2 2-6 yrs 2nd and 3rd stage 850-1050 lbs 825.00-1050.00, 1st
stage 890-1050 lbs 725.00-800.00; short and solid mouth to aged 2nd and 3rd stage couple 875-890 lbs
450.00-515.00 per head.
Cow/Calf Pairs: Medium Large 1-2 4-6 yrs 1220-1350 lb cows w/babies to 145 lb calves
1175.00-1450.00; short and solid mouth 1150-1275 lb cows w/175-200 lb calves and rebred
1025.00-1125.00. Medium 1-2 5 yr 1050 lb cow w/180 lb calf 1125.00; 3 yrs to aged couple pkgs
1000-1020 lb cows w/150-350 lb calves 925.00-1100.00 per pair.
St. Joseph, MO:
Bred Cows: Medium and Large 1 (Per Head / Actual Wt) 2-4 years old 1085-1320 lbs 4-6 months bred
1200.00-1500.00; 2-8 years old 1150-1523 lbs 7-9 months bred 1650.00-1900.00; 5-8 years old
1330-1850 lbs 1-6 months bred 925.00-1200.00; 5-8 years old 1289-1655 lbs 7-9 months bred
1300.00-1700.00; >5 years old 1434 lbs 7-9 months bred 1425.00; >8 years old 1298-1572 lbs 1-6
months bred 710.00-985.00; >8 years old 1220-1738 lbs 4-9 months bred 900.00-1250.00. Medium and
Large 1-2 2-4 years old 870 lbs 4-9 months bred 850.00; 2-8 years old 1205-1395 lbs 7-9 months bred
1125.00-1350.00; >5 years old 1409-1558 lbs 7-9 months bred 1000.00-1300.00.
Cow-Calf Pairs: Medium and Large 1 (Per Family / Estimate Wt) 2-4 years old 1252 lb cow w/ 150-300 lbs
calf 1900.00; >5 years old 1215-1470 lb cow 0-3 months bred w/ 150-300 lbs calf 1360.00-1500.00; 2-8
years old 1280-1480 lb cow 0-6 months bred w/ >300 lbs calf 1235.00-1575.00; >8 years old 1380 lb cow
w/ >300 lbs calf 1450.00. Medium and Large 1-2 2-4 years old 900-1095 lb cow w/ 150-300 lbs calf
1260.00-1375.00; >8 years old 1055-1255 lbs cow w/150-300 lbs calf 910.00-1000.00; >8 years old 965
lb cow w/ <150 lbs calf 500.00. Medium 1 >5 years old 1000 lb cow w/ 150-300 lbs calf 800.00.
West Plains, MO:
Bred Cows: Medium and Large 1-2 2-6 yr old 1020-1505 lb cows in the 2nd-3rd stage 1150.00-1450.00
per head, 1st stage 1050.00-1100.00 per head; Seven yrs to short-solid mouth 1188-1470 lb cows mostly
in the 3rd stage 900.00-1175.00 per head. Medium and Large 2 2-7 yr old 780-1385 lb cows in the
2nd-3rd stage 700.00-1125.00 per head, 1st stage 700.00-925.00; Short-solid to broken mouth 1035-1335
lb cows in the 1st-3rd stage 650.00-900.00 per head.
Cow-Calf Pairs: Medium and Large 1-2 3-7 yr old 984-1500 lb cows with 100-300 lb calves
1250.00-1500.00 per pair, 3-n-1 pkg 4 pair 3-6 yr old 1321 lb cows in the 1st-2nd stage with 300 lb calves
1675.00 per pair; Short-solid to broken mouth 977-1360 lb cows with 100-300 lb calves 1275.00-1325.00
per pair. Medium and Large 2 2-7 yr old 950-1175 lb cows with 100-200 lb calves 1000.00-1300.00 per
Bred Cows: Heifers 990-1085 lbs 1500.00-1535.00, several 1100.00-1325.00, few 725.00-1010.00;
Young 960-1785 lbs mostly 1400.00-1550.00, several 1125.00-1375.00, individuals or small packages
825.00-175.00; Middle Aged (Short Solids) 1130-1630 lbs 1025.00-1150.00, few 750.00-975.00; Aged
(Short Term) package reputation quality 1409 lbs 1200.00, several 1150-1690 lbs 810.00-1000.00, few
660.00-785.00 all per head.
Cow/calf Pairs: Young few 1075-1095 lb cows with 75-300 lb calves 1525.00-1550.00, couple 825 lb cows
with 325 lb calves 1300.00; Middle Aged (Short Solids) individual 1140 lb cow with 400 lb calf 1400.00;
Aged (Short Term) individual 1190 lb cow with 70 lb calf 750.00, couple (Longhorns) 945 lb cows with 200
lb calves 610.00 all per head.
Replacement Cows: Medium and Large 1-2 2-7 year old 850-1250 lbs 2nd-3rd stage
93.00-103.00/975.00-1075.00, first stage/open 73.00-83.00, 7-10 year old 2nd-3rd stage
59.00-69.00/725.00-825.00 per head.
Cow-Calf Pairs: Medium and Large 1-2 3-7 yr old 800-1200 lb cow w/100-200 lb calf 1225.00-1325.00,
some to 1625.00, 200-300 lb calf 1225.00-1325.00 per pair.
Alberta Beef Producers: Alberta direct cattle sales Thursday saw light trade develop with dressed sales marked at 276.00 delivered. Initial sales are positioned at the top end of last week's trading range. Buying interest in the cash market has been mixed with the bulk of sales going to one buyer. Cash to futures basis levels did weaken but remain stronger than the five-year historical average.
Prices have been converted to U.S. $/CWT. Grades changed to approximate U.S. equivalents
Exchange Rate: Canadian dollar equivalent to $0.7949 U.S. dollars
USDA National Retail Beef Report:
Advertised Prices for Beef at Major Retail Supermarket Outlets
This week in Beef Retail, the Feature Rate fell by 4.1 percent, the Special Rate was 2.1 percent lower, and the Activity index posted a 11.3 percent decrease. This week retailers seemed to feature Boneless Ribeye steaks in hopes consumers would feature beef for this Valentines Day. Cuts from the Round and Ground Beef items saw more ad space while, cuts from the Rib, Chuck, Loin, and Brisket saw less ad space. The cattle slaughter under federal inspections saw a .8 percent increase when compared to last week.
"Shootin' the Bull" Weekly Analysis:
In my opinion, the cattle market remains in a friendly environment due to employment, wages, and tax cuts. A couple things are becoming apparent. The most interesting being what I perceive as excellent demand due to palate over pocket book. I've watched poultry stocks increase over the past several months. All the while, broiler and fryer production has remained the same or declined slightly. With pork, it is a little different, but as stocks are building, so to is production. I believe both to be suffering from the increase of beef consumption and its lower price discrepancy between the two than in times past. An accomplishment was made this week in most of the contract months. The previous highs made on 1/25 and 2/5 were exceeded this week and closed above. This suggests that a minor wave 1 and 2 are complete and minor wave 3 is in progress. The oscillator turned back up solidly by weeks end without having gone back below the zero line. Upside potential for minor wave 3 is $136.12 April. I would dare to say that equity traders are done robbing Peter to pay Paul. Although equities are anticipated to remain volatile, I don't think there is much left to liquidate in commodity accounts that would do much good on another route in the equity market. I believe what we are witnessing in the cattle market at present is the need of the packer to own inventory, with razor thin margins, and not wanting to tip their hand to needs. Vertical integration is perceive to have increased through 2017. With working capital always an issue, and the increasing export demands, more companies or operations joined vertical integration to insure capital requirements and to meet the needs of demand.
So, what I see is strong demand and under vertical integration, those involved "have" to meet the requirements of delivery. With the disruption in growing patterns, placing stockers on feed, and extremely current marketing's, the steady supply is now a broken line. The holes are anticipated to create issues like at present. Two weeks prior to seasonal demand increasing greatly and most fat contract months are within striking distance of contract high. Even more important than this, recall last weeks comments on the equity market route and inflation. Are neither of those factors pertinent today? No, they are not. Cooler heads are now prevailing and the direction beef prices took is higher. Now, to speak clearly from both sides of my mouth. Yes, I do believe fats and feeders will both trade higher. Yes, I do believe that this is an excellent environment to market inventory into. So, chose your marketing's carefully and attempt to use options and options strategies over futures. For the fats, I am going to attempt to market some inventory with an at the money $134.00 April put were the underlying futures to trade to this level. This would be shy of my target by $2.00 and maybe provide some leeway up to $136.00. Once the puts are acquired, then I want to wait to see what the next move looks like. Upon that direction being found, I will then look to sell a put or call to help reduce the premium paid for the initial put and secure a window in which to market the physical.
Feeders are lagging at the moment because everybody wants to know the same thing, "what will the spring feeder cattle crop be?" I know there are plenty of stockers placed that will become feeders in April, May and June, but what about the 800# to 900# steer ready to go on feed in April or May? Will there be a 25% to 35% decline in feeder cattle inventory this spring? I don't know, but I do know that every stocker placed will not be available to the open market again as feeders. I believe commercial yards bought those stockers and that is most likely due to them having commitments in the future that they now have wrapped up. Take a look at the weekly continuation chart. There is one on my website if you don't have one. There are two peaks and more often than not, a third peak will make itself known at some point in time. I think we are on the verge of making that third peak. Therefore, again talking out of both sides of my mouth, I anticipate feeder prices to move higher, but creating an opportunity to market inventory into. I continue to view the $155.00 area due to its close proximity to the two weekly chart peaks, and the profitability I believe it brings to a large portion of cattle. If this price can be secured with a put option, then I believe at some point in the more distant future, the sale of a put or call to reduce this premium would help to produce a higher minimum sale price. I do not want to be short this market for the sake of being short and I do not want to use futures to market inventory.
What I don't anticipate is a runaway market. I don't see an aspect to where there is going to be a shortage of feeder cattle. I do think there are significant disruptions of distribution and those will create holes. If those holes create a price spurt, then I will use that to further pursue marketing of inventory. My recommendation is to buy the at the money put options, on the month you need, when the underlying futures contract trades to as close to $155.00 as you can stand. Once you stop squealing like a stuck hog for paying that kind of premium, focus on the next $10.00 to $15.00 move. Whether higher or lower, the potential to sell a put or call will reduce a portion of the premium, raise the minimum sale floor, and produce a window in which your physical inventory will be marketed in. Yes, it does sound easy. No, in no way is it. Spreads are impacting the contract months that it may be more difficult to achieve a price on one month than another. While this may be difficult, attempt to market your physical inventory as close to the expiration of the futures/options contract as you can.
Grains sidestepped all week long. Wheat has built a major contracting wedge with an upward slant to it. This is friendly in my analysis. Corn continues to try to stay higher while beans have moved towards contract high. The meal market is the leader in all of this. Significant increases in hog production and stable production of poultry is keeping meal elevated. Energy prices were volatile at weeks end. Although I do not want to participate in a futures or options trade in energy, I do highly recommend you visit with your fuel provider and lock in a large portion of your spring needs today. If nothing else, top off the farm fuel tanks.
Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Over the past 5 years, an average of around 10% of U.S. beef production has been exported, making exports an extremely important factor affecting beef and cattle prices. A strong dollar depresses export demand.
Boxed beef cutout values higher on Choice and Steady on Select on moderate to fairly good demand and moderate to heavy offerings. Select and Choice rib, chuck, and round cuts mostly steady while loin cuts steady to firm. Beef trimmings moderately to sharply higher on moderate demand and light offerings.
The average value of hide and offal for the five days ending Fri, Feb 16, 2018 was estimated at 10.27 per cwt., down 0.06 from last week and down 1.63 from last year.
Historically, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers.
# Head Week Ago Year Ago YTD Year Ago
National 8,503 7,207 7,596 41,187 39,029
S Central 2,764 1,474 2,317 14,329 11,586
N Central 811 1,070 718 3,844 3,171
East 2,172 1,708 1,299 10,230 7,980
West 1,136 1,334 1,468 4,978 7,900
Midwest 1,620 1,621 1,794 7,806 8,392
Total red meat production under Federal inspection for the week ending Saturday, February 17, 2018 was estimated at 1006.2 million lbs. according to the U.S. Department of Agriculture's Marketing Service.
This was 0.2 percent higher than a week ago and 3.1 percent higher than a year ago. Cumulative meat production for the year to date was 2.7 percent higher compared to the previous year.
Weekly Hay Reports: "Click" on links for detailed report
Washington - Oregon (Columbia Basin)
The USDA reports feed ingredient prices for the week ending February 13, 2018 were mixed.
Soybean Meal was 23.00 to 42.50 higher. Cottonseed Meal was steady to 35.00 higher. Canola Meal was 33.50 to 35.00 higher. Linseed Meal was steady to 10.00 higher. Sunflower Meal was steady to 10.00 higher.
Whole Cottonseed was steady to 5.00 higher.
Crude Soybean Oil was 159 to 184 points lower. Crude Corn Oil was 145 points lower.
Ruminant Meat and Bone Meal was mixed, 5.00 lower to 20.00 higher. Ruminant Blood Meal was steady to 50.00 lower. Feather Meal was steady to 15.00 higher. Menhaden Fishmeal was not well established.
Corn Hominy was steady to 2.00 lower. Corn Gluten Feed was steady to 3.00 higher. Corn Gluten Meal was steady.
Distillers Dried Grain was mixed, 10.00 lower to 5.00 higher.
Wheat Middlings were mixed, 10.00 lower to 5.00 higher. Wheat millrun was steady to 9.00 higher.
5 Year Bullish/Bearish Consensus Charts:
The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
They get too bullish after prices have risen and too bearish after they have already fallen.
Because of this tendency, there are often extremes in opinion right before major changes in trend:
When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead.
And when they become too bearish, then prices tend to rise.
So when Public Opinion moves above the red dotted line in the chart, it means that compared to other readings over the past year, you're seeing excessive optimism. You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion. Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.
Conversely, when Public Opinion moves below the green dotted line, then the public is excessively pessimistic about the commodity's prospects for further gains compared to their opinion over the past year. Looking for absolute readings under 20% (or especially 10%) often indicates an upturn in the market.
Stock Markets & Economic News:
T. Rowe Price
STOCKS FOLLOW WORST WEEK IN TWO YEARS WITH BEST ONE IN OVER FIVE
Stocks carried over the momentum they had recaptured the previous Friday and recorded their best weekly gain since early 2013. The technology-heavy Nasdaq Composite performed best, helped by solid gains in the stocks of Apple and networking equipment maker Cisco Systems. Along with information technology, the financials, health care, and industrials and business services sectors also outperformed within the S&P 500 Index, while energy shares lagged despite a sharp rally in oil prices on Wednesday. Having entered correction territory—or a decline of 10% or more off recent peaks—the previous week, the indexes ended Friday with gains for the year to date and only 4% to 5% off their January highs.
INVESTORS TAKE HIGHER INFLATION SIGNALS IN STRIDE
The market’s rebound appeared to be driven in large part by diminishing fears about higher inflation and interest rates. Wednesday morning’s consumer price inflation data came in a bit higher than expected, on both a core (excluding energy and food prices) and overall basis. Stock futures dropped on the release of the figures, but the market recovered its footing later in the day and ended solidly higher. A sharp rise in the prices of apparel and home furnishings and supplies was responsible for much of the rise in core inflation, but T. Rowe Price Chief U.S. Economist Alan Levenson notes that a similar spike in those categories a year ago was offset by declines in later months. Producer price data, released on Thursday, was in line with consensus estimates, overall, but higher than anticipated on a core basis. T. Rowe Price traders noted that the report again seemed to have little impact, however.
"Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
An unsettled weather pattern will maintain periods of rain and snow over much of the nation, although pockets of dryness will persist. A series of storms will bring moderate to heavy rain and mountain snow to much of the west, although unfavorably dry conditions will persist from California into western Nevada. East of the Rockies, an active southern storm track will bring much-needed precipitation to locales from southeastern New Mexico across the southern two thirds of Texas into southern Oklahoma and the northern Delta. Despite the welcomed storminess, dry weather will linger from the south-central Plains into western Missouri as well as over the lower Southeast. Farther north, another round of moderate to heavy snow is expected from Montana into the Great Lakes and eastern Corn Belt, and may include the Mid-Atlantic as well as Northeastern States.
The NWS 6 to 10-day outlook for February 20 – 24 calls for near- to above-normal precipitation over much of the nation, in particular areas east of the Mississippi save for Florida and the lower Southeast, where drier-than-normal conditions are expected. Below-normal precipitation is also anticipated in the Southwest and on the southern High Plains. Above-normal temperatures over the southern and eastern U.S. will contrast with colder-than-normal weather from the Pacific Coast States into the upper Midwest.
Feedyard Closeouts: Profit/(Loss)
Closeout projections are for cattle placed on feed by a cattle owner at a commercial feedyard and not for cattle owned by a feedyard and fed at cost or a farmer/feeder utilizing his own feed.
Typical closeout for un-hedged steers sold this week:
Placed On Feed 165 days ago = July 17th
P/(L) based on the futures when placed on feed: $55.19
Cost of 750 lb. steer delivered @ $150.66 per cwt: $1,129.95
Feed Cost for 600 lbs. @ $76.40 per cwt: $458.40
Interest @ Prime + 2% on cattle cost for 165 days: $29.37
Interest @ Prime + 2% of the feed cost for 165 days: $5.96
Total Cost & Expense: $1,623.68
Sale proceeds: 1,350 lb. steer @ $121.00 per cwt: $1,633.50
This week's Profit/(Loss) per head: $9.82
Profit/(Loss) per head for previous week: ($3.36)
Change from previous week: + $13.18
Sale price necessary to breakeven: $120.27
Projected closeout for steers placed on feed this week:
Projected Sale Date @ 165 days on feed = June 12th
Cost of 750 lb. steer delivered @ $149.82 per cwt: $1,123.65
Feed Cost for 600 lbs. @ $74.77 per cwt: $448.62
Interest @ Prime + 2% on cattle cost for 165 days: $31.75
Interest @ Prime + 2% of the feed cost for 165 days: $6.34
Total Cost & Expense: $1,610.35
Sale proceeds: June Futures @ $113.65 per cwt: $1,534.28
This week's Profit/(Loss) per head: ($76.08)
Profit/(Loss) per head for previous week: ($113.60)
Change from previous week: +$37.52
Sale price necessary to breakeven: $119.29
Friday negotiated cash trade was moderate on good demand in all feeding regions. Early live purchases in the Southern and Northern Plains have been reported from 129.00-130.00. Dressed purchases in Nebraska and the Western Cornbelt traded dressed purchases traded 5.00 higher at 205.00.
Confirmed: 25,170 Week Ago: 7,111 Year Ago: 4,756
Formula Purchases: Net - Dressed
Head count priced today: 21,700
Weighted avg weight: 849.00
Weighted avg net price: 200.28
CATTLE CALVES HOGS SHEEP
Friday (est 115,000 2,000 450,000 7,000
Week ago (est) 111,000 2,000 435,000 5,000
Year ago (act) 108,000 3,000 437,000 6,000
Week to date (est) 575,000 10,000 2,300,000 37,000
Last Week (est) 575,000 10,000 2,293,000 39,000
Last Year (act) 547,000 10,000 2,133,000 36,000
Saturday (est 21,000 0 84,000 0
Week ago (est) 16,000 0 96,000 0
Year ago (act) 30,000 0 222,000 1,000
Week to date (est) 596,000 10,000 2,384,000 37,000
Last Week (est) 591,000 10,000 2,389,000 39,000
Last Year* (act) 576,000 10,000 2,356,000 36,000
2018 YTD 4,164,000 73,000 16,464,000 251,000
2017 *YTD 4,056,000 72,000 16,215,000 255,000
Percent change 2.7% 1.5% 1.5% -1.5%
National Grain Summary:
Compared to last week, cash bids for corn, wheat and sorghum were mixed, soybeans were higher. Soybeans continued to push higher through yesterday, closing 22 ½ cents higher on the week. This bullishness could be fueled by continued concerns of dry weather in South America. Last week’s export sales and shipments totaled 77.7 million bushels and 34 million bushels of corn, 23.5 million bushels and 50.5 million bushels of soybeans, and 11.4 million bushels and 18 million bushels of wheat. All export sales and shipments data for last week could be viewed as bearish. Wheat was mixed from 11 1/2 cents lower to 15 1/2 cents higher. Corn was mixed from 3 cents lower to 4 cents higher. Sorghum was mixed from 15 cents lower to 3 cents higher. Soybeans were 36 1/2 to 55 1/2 cents higher.
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