Feeder Cattle contracts continue to be pressured by higher grain futures
Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The Market Update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA NASS and AMS reports.
Cash cattle were slightly higher last week as reported by the USDA. Trade developed early this week and was mostly steady. While the cash trade has not been able to gain much ground recently, prices for both beef breed and Holstein steers are about $20.00 higher than they were this time last year.
Live Cattle futures contracts on the Chicago Board of Trade have been waiting for direction from the cash trade. Carcass weights have been dropping, averaging 839 pounds last week. That is still 10 pounds heavier than last year. The percentage of heifers harvested can impact the overall average carcass weight reported from week to week.
Feeder Cattle contracts continue to be pressured by higher grain futures. However, they closed higher Wednesday as corn and soybeans closed lower.
Harvest tapered off at the end of last week and totaled an estimated 639,000 head, 20,000 less than the previous week but 36,000 head more than a year ago. The Choice beef cutout has been gaining, jumping another $3.49 on Tuesday to $271.53. Average cattle feeding margins exceeded $206.00 per head the final week in March, according to the Sterling Beef Profit Tracker. That average was $56.00 per head higher than a year ago. he calculations were based on five-area fed cattle prices of $140.00/cwt.
Report fails to spur uptick in lean hog futures prices
Many thought the bullish Hogs and Pigs report last week would lead to an uptick in Lean Hog futures prices, but that did not materialize until showing some strength Wednesday.
Last week’s estimated harvest of 2.442 million was 23,000 head more than the previous week and 18,000 less than the same week last year. The pork cutout value has struggled to maintain the highs seen last two weeks. However, it is still above $100.00, posted at $103.60 Tuesday and increased to $104.37 Wednesday.
Hams and bellies are seeing the largest drop in value. Farrow-to-finish pork producers saw profits of $72.00 per head, $8.00 lower than the previous week according to the Sterling Pork Profit Tracker. Lean carcass prices were $108.29 per cwt. last week, $3.70 lower than the previous week. Hogs traded at $75.02/cwt the same week a year ago.
Beef exports up in February
Beef exports in February were up five percent from a year ago at 108,501 metric tons while value climbed 35 percent to $904.4 million. Through the first two months of the year, exports increased nine percent while value soared by 46 percent. February beef export value equated to $445.95 per head of fed cattle harvested, up 29 percent from a year ago.
Pork exports trended lower year-over-year, as larger shipments to Mexico and Japan did not offset the continued decline in demand from China/Hong Kong. February pork exports were 198,539 metric tons, down 17 percent from a year ago while export value fell 14 percent to $541.3 million.
Through February, exports were also down 17 percent in volume and 14 percent in value. February pork export value equated to $54.44 per head harvested, down 10 percent from a year ago. Lamb exports reached the highest monthly value since 2014. February exports of U.S. lamb totaled 1,580 metric tons, up 37 percent from a year ago. Export value was $2.56 million, up 62 percent.
State livestock market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady. High-yielding, high-grading cattle brought $121.00 to $138.00/cwt.
High Choice and Prime type cattle with an overnight stand at the auction market sold from $139.00 to $143.00/cwt. Choice and Prime Holstein steers were strong again this week at $93.00 to $125.00/cwt. with reports of some high yielding steers selling to $128.00/cwt and a few packages higher.
Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $93.00/cwt. Dairy x beef steers were mostly $100.00 to $134.00/cwt.
Cows were higher at $56.00 to $80.00/cwt. Beef breed cows in fleshier condition sold into the low $90.00s/cwt. Doubtful health and thin cows were bringing $56.00/cwt and down. Dairy breed bull calves were steady with last week at $65.00 to $150.00/cwt with heavier, well cared for calves up to $200.00/cwt.
Beef and beef cross calves were lower bringing up to $400.00/cwt with some selling above. Market lambs were higher selling up to $255.00/cwt.