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| The Cattle Range Weekly Market Summary provides market data for the informed cattleman. Current industry news & commentary as well as a comprehensive comparison of the past week's prices from around the country in comparison to the previous week, month, 6 months ago, 1 year ago, & 5 year average. The data is compiled from a variety of sources and is organized to provide insight in determining market movement and trends. | |||
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| SAMPLE... Market Summary for the week ending May 3rd... |
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| The Cattle Range 10-Day Market Trend: |
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| An indicator
of overall cattle market strength.
The angle indicates direction & velocity of the trend. |
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| The Trendline
is based on daily market factors for the past 10 days.
The daily factors are weighted calculations of the cumulative Gain/(Loss) of 10 major market factors compared to the previous trading day. |
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| National Feeder & Stocker Cattle Weekly Summary: |
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| RECEIPTS:
Auctions Direct Video/Internet
Total
This Week 193,500 67,900 27,900 289,300 Last Week 195,200 50,700 62,100 308,000 Last Year 168,400 25,500 25,500 219,400 |
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| Compared to
last week’s closing market, feeder cattle sold steady to 2.00 higher with
much less volatility than in recent weeks. Stocker cattle and calves
traded mostly steady to 3.00 higher with many areas of the Southeast as
much as 10.00 higher in instances, especially on lightweights under 500
lbs. Many early-week auction markets reported trends even higher
than this, but they were merely catching-up with last week’s sharp gains
experienced after Tuesday. Demand continued good to start this week’s
trading session with favorable weather conditions promoting pasture growth
and Corn Belt farmers getting started on this year’s late corn planting.
However, the early-week sunshine soon seemed like the shortest summer ever as yet another cold front moved across the country’s mid-section on Wednesday. Cold wind and rain fell south of Interstate 70 while the Northern Plains received snow and blizzard conditions on the first day of May with measurements up to and surpassing one foot deep. The onset of the storm’s approach did not hamper feeder cattle demand as much as the recent spring storms as backgrounders and feeders have found that recovery is fairly quick this time of year. Plus, auction receipts are dwindling at a fast pace and buyers realize they need to fill orders now while there are still cattle available. For the balance of the spring, many producers will be concentrated on getting their corn and soybeans in the ground while most available supplies of calves and yearlings will be turned-out on grass until the Summer Yearling Specials. The winter of 2012-2013 will simply not give up with snowplows needed to clear baseball fields and temperatures keeping folks from enjoying their typical spring activities. Backyard grilling is one right of spring that is lacking and beef movement continues sluggish, however the Choice boxed beef cut-out value is near an all-time record high over 200.00. Fed cattle trading broke an all-time record with Northern Plains live sales reported in Nebraska on Wednesday from 130.00-131.00 which surpassed the previous record of 130.50 reported in March of 2012. Southern Plains sales were from 128.00-129.00 with both regions trending steady to 1.00 higher, but the benchmark break was bitter-sweet as most pens are still posting losses. Some packers were reportedly caught short-bought as they prepare for what they hope will be a banner Memorial Weekend to unofficially start the summer. This week’s reported auction volume included 60 percent over 600 lbs and 44 percent heifers. |
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| Stocker Steers: |
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| Five Year Moving Average - Stocker & Feeder Steers: |
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| Cattle Futures:
. Cattle futures reportedly set back early Friday morning as bulls took profits on recent gains, then accelerated downward in reaction to talk that wholesale prices have lost their upward momentum. Many traders may also think the ongoing surge will end in the near future, with cash and wholesale prices declining sharply soon thereafter. June cattle plunged 1.82 cents to end the week at 121.82 cents/pound, while December lost 1.57 cents to 126.90. August feeder cattle futures plummeted 2.15 cents to 147.50 cents/pound, while November skidded 2.15 cents to 152.12. |
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| Representative Sales of Cow & Pairs: |
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| Canadian Packer Bids Strengthen: |
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| The Canfax
average steer and heifer price closed the week at $118.00/cwt and $117.00/cwt
respectively, up $2.75-4.00/cwt from the previous week. Packer competition
was evident and bids strengthened over the course of the week. Two-tier
pricing was evident with premium being paid for long fed cattle verses
greener calves. Accumulated sale volumes totaled 9,200. The Alberta fed
cash to futures basis strengthened to close at -12.04. Canadian fed exports
to the US for the week ending April 13th totaled 11,336 head.
The Canfax average steer price closed the week $0.22 lower while heifers eased $0.14. Stockers and feeders less than 700 lbs traded $0.50-1.50/cwt lower last week and feeders over 700 lbs trended $1.00 higher. The Western Canadian calf index closed at $144.17/cwt, down $1.54. Alberta auction volumes totaled 21,400. Canadian feeder exports to the US for the week ending April 13th totaled 10,291 head. An increase in calving culls pressured prices last week. D1, D2 cows traded $1.75 lower with live trade reported from $73.00-86.00/cwt. Last week D3 cows averaged $70.00/cwt. Rail bids were reported fully steady. Butcher bulls averaged $88.45/cwt, down $1.15 from the previous week and live trade was reported from $79.00-97.00/cwt. Canadian non-fed exports to the US for the week ending April 13th totaled 7,874 head. |
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| Canadian
Cattle Prices:
Prices have been converted to U.S. $/CWT. Grades changed to approximate U.S. equivalents Exchange Rate: Canadian dollar equivalent to $ 0.9920 U.S. dollars |
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| Prices for
the week ending April 26th:
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| Seasonal Price Trends: |
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| It will be
no small surprise to market veterans that fluctuations in cattle prices
have a seasonal trending nature. The highs for the year are frequently
posted in April and the market generally declines into the summer. It also
was not surprising to see a forecasting group associated with the national
association assert that the spring highs are in this past week and the
market will likely move toward summer lows of $118 soon.
This has been a year in which the market defies expectations. April live cattle futures traded in the high $130s in early January. Forecasters accurately observed that supplies of cattle in the first half of the year would decline and they surmised beef prices would skyrocket. Feedlots made purchases requiring a $140 breakeven. Skyhigh prices never came and losses in the feeding sector continued unabated. The market also defied the speculators who placed bets on $137 April futures contracts. The market for its part has been relatively stable trading in a range between $123-128 for months on end while futures prices trade at extremes on either side of the range. June live cattle are currently trading just short of $122. This is $6 short of the market lows called for by the forecasters but it is also $6 shy of the current cash prices. $128 and $130 in the north have served as a market barrier for a major advance in price. $200 in the box cut out has also tended to provide a ceiling to price advances. This might be a year for a contra seasonal move in the cash cattle and boxed beef cutout markets. Cold weather has hampered beef demand and weather forecasters are finally calling for a warm up across the north and northeast. If beef demand kicks in for springtime, cattle supplies will fall short of demand -- setting the stage for improving prices at a time when usual expectations are for lower prices. Additionally the cow slaughter that has been exceeding prior year may fall to well under last year's numbers adding additional support to the end meats. Sellers also will feel emboldened by their leverage demonstrated in negotiations last week. First bids do not require acceptance. Packers need cattle to slaughter not futures. Packers will talk a lot about $123 June futures following the expiration of the April live cattle contract but it is not unusual for cattle to trade $4-5 premium to the June board in May. Friday's cutout reflected some evidence of this move when following the largest weekly slaughter figure in recent weeks at 625,000 cattle, box prices moved higher. If beef demand kicks in then it is possible packers may pull forward on increasing supplies of cattle this summer farther reducing tonnage and adding impetus to price. The Cattle Report |
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| Shootin' the Bull: |
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| In my opinion,
the cattle market got beat up a little more than maybe it deserved Friday.
After most futures contracts set the highest price from contract low on
Thursday, traders perceived that the already poor demand was going to get
worse. Most charts viewed have reflected a poor demand situation
from domestic to export. I do not understand how it could get much
worse than it already is. The employment numbers were perceived as
friendly. Equities set new historic highs in some instances and bonds,
finally, plummeted. These are perceived as signs of a healing economy.
So, for what ever reason traders turned negative after a near historic
price paid for fats, a historic high in box prices and no apparent detriment
from feed costs, I remain friendly towards the cattle. In my analytical
tool box, I've kept watch of a pattern that I liken to falling off a cliff,
similar to what fats did today. My analysis is that it will spend
the next couple of days attempting to climb the cliff it created.
Feeder cattle fared no better. August moved lower to just under a .618% retracement level. The trade lower in fats is anticipated to have deflated optimism in the feeders. It has been an unseasonably slow summer coming. Grass in some areas has not begun to flourish. No significant chart damage was done in the feeders. However, prices need to hold near this area. As stated last week, pessimism can be at a higher level on wave 2 corrections than at the termination of a move. It will be interesting to see if the readings are more bearish Monday than when feeders bottomed in the middle of April. Corn was able to maintain the majority of gains from Monday and Tuesday. With weather appearing to improve next week, I would anticipate corn to start moving lower again. This weeks rally is perceived as another opportunity to make cash sales. Although December was able to trade out of the down trend channel for a day this week, it closed back into the channel. Comments are shy this week due to seemingly nothing having changed, yet prices fluctuated adversely to analysis. Christopher B. Swift is a commodity broker and branch manager of Rosenthal Collins Group Nashville, TN office. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" 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. |
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| Photo of the Week: |
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| The Saga of Bart -- Trials & Tribulations of a Cattle Buyer |
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| After the party,
as Bart and his wife were driving home, she asked, "Honey, have women ever
told you how handsome, sexy, and irresistible you are?"
Flattered and wanting to appear humble, Bart thoughtfully answered, "No, I guess not." With quiet fury, his wife demanded, "Then what in the Hell gave you THAT idea at the party tonight?" |
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| Submit a "Bart Joke" If we use it, you'll receive a $25.00 Gift Certificate to The Cattle Range Mercantile. |
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| Out of Kilter: |
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| A good way
to determine if something is, “going on” in a market is by noticing when
market relationships are out of kilter. Cattle and grains typically have
a positive correlation. They tend to move in tandem. Moderately increase
the price of corn and the cattle will follow suit. The opposite is also
true as the cost of feed declines, so does the cost of production. However,
when this relationship breaks down, it’s because one market can’t keep
pace or pass on the costs of the other.
That is what occurred last spring with cattle and corn. The price of feed exceeded the livestock market’s ability to pass on the costs. The trend for the past several months has been a narrowing of last spring's extreme range but has recently begun to widen. Normally, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers. |
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| 5 Year Moving Average: |
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| Crude/Cattle Correlation: |
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| The chart below
shows a fairly consistent correlation between the prices for crude oil
and slaughter cattle. Since it is unlikely the price of cattle affects
the price of oil on the world market, it might be assumed the price of
crude oil affects the price of cattle, but that is unlikely as well.
It is more likely that economic factors affecting demand for crude oil
have a similar effect on demand for beef.
Accordingly, in the absence of geo/political events disrupting or distorting oil supply, since price trends occur slightly sooner in the crude oil market, it appears that crude oil might be a good indicator of the direction of near-term cattle prices. |
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| 3 Year Moving Average: |
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| Slaughter Cows & Bulls Average Yielding Prices: |
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| Slaughter cows
and bulls sold unevenly steady. USDA's Cutter cow carcass cut-out
value Friday morning was 162.20 -- Up 1.40 from last Friday.
Prices paid for average dressing:
%Lean Weight
Colorado Oklahoma
Alabama
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| Weekly Hay Reports: "Click" on links for detailed report | ||
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| Weekly Feedstuffs Market Review: |
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The USDA Market
News Service reports feed ingredient prices for the week ending April 30,
were mixed. Soybean Meal was 10.80 to 24.60 higher. Cottonseed Meal was
5.00 lower to 5.00 higher, mostly steady to 5.00 lower. Whole Cottonseed
was 5.00 to 10.00 higher. Canola Meal was 19.30 to 29.30 higher.
Linseed Meal was 15.00 higher. Sunflower Meal was steady.
Crude Soybean Oil was 56 to 131 points higher. Crude Corn Oil was
25 points lower. Meat and Bone Meal was 15.00 lower to 5.00 higher,
mostly steady to 15.00 lower. Blood Meal was 50.00 lower to 35.00 higher,
mostly steady to 35.00 lower. Feather Meal was steady to 30.00 lower.
Fishmeal was steady. Corn Hominy was steady to 5.00 lower. Corn Gluten
Feed was steady to 28.00 lower. Corn Gluten Meal was steady to 30.00
lower. Distillers Dried Grains were 10.00 lower to 5.00 higher. Wheat
Middlings were 50.00 low4e4r to 5.00 higher, mostly 20.00 to 40.00 lower.
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| Est. Weekly Meat Production Under Federal Inspection: |
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| Total red meat production under Federal inspection for the week ending Saturday, May 04, 2013 was estimated at 929.8 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 1.3 percent lower than a week ago and 0.6 percent higher than a year ago. Cumulative meat production for the year to date was 1 percent lower compared to the previous year. |
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| National Sheep Summary: |
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| Compared to
last week slaughter lambs were weak to5.00 lower at San Angelo, TX and
40.00-50.00 higher at New Holland, PA. Slaughter ewes were 2.00-5.00 lower,
except at New Holland 10.00-20.00 higher. Feeder lambs were not well
tested. At San Angelo, TX 6121 head sold in a one day sale.
Equity Electronic Auction sold 2400 feeder lambs in Texas. In direct
trading slaughter ewes not tested and feeder lambs were steady, instances
2.00-5.00 higher. 4600 head of negotiated sales of slaughter lambs
were 2.00-3.00 higher and 14,100 head of formula sales of dressed lambs
under 65 lbs were not well tested; 65-85 lbs were steadyto 3.00 higher;
over 85 lbs were 1.00-2.00 lower. 7,880 lamb carcasses sold with
55 lbs and down sharply higher; 55-85 lbs 2.80-8.26 lower and 85 lbs and
up 1.10 higher.
"Click Here" to view this week's prices |
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| Bullish/Bearish Consensus: |
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The theory
behind the "Bullish/Bearish Consensus" indicator is when the public
reaches a consensus, they are usually wrong:
Conversely, when Public Opinion moves below the green dotted line, then the public is too 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. |
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| Bullish/Bearish
Consensus - Cattle
Last Updated: April 30th |
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| Bullish/Bearish
Consensus - Corn
Last Updated: April 30th |
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| Inflation: Not "If" but "When and How Much" |
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| The Federal
Reserve on Wednesday kept its targeted interest rate and its bond purchase
program the same, as the central bank for the first time formally stated
that it could increase or decrease bond buying from the current pace "as
the outlook for the labor market or inflation changes." Fed Chairman Ben
Bernanke had communicated the central bank could adjust the pace at his
last press conference, but that wasn't previously part of the statement.
Otherwise, there wasn't much new: the Fed said the economy is expanding
at a "moderate" pace with inflation running "somewhat below" the desired
longer-run objective. In an 11-to-1 vote, the Fed kept its Fed fund target
rate between 0% and 0.25%, its program of buying $40 billion per month
of mortgage-backed securities and $45 billion of Treasury securities, and
its plan to keep rates low at least so long as unemployment is above 6.5%.
Kansas City Fed President Esther George again was the sole dissent, on
concerns over the risks to future imbalances.
The Federal Reserve's "targeted interest rate and its bond purchase program" is more commonly known as "Quantitative Easing." Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to change money supply, in order to keep market interest rates at a specified target value. Process:
If the nominal interest rate is at or very near zero, the central bank cannot lower it further. Such a situation, called a liquidity trap, can occur, for example, during deflation or when inflation is very low. In such a situation, the central bank may perform quantitative easing by purchasing a pre-determined amount of bonds or other assets from financial institutions without reference to the interest rate. The goal of this policy is to increase the money supply rather than to decrease the interest rate, which cannot be decreased further. This is often considered a "last resort" to stimulate the economy. The U.S. Federal Reserve held between $700 billion and $800 billion of Treasury notes on its balance sheet before the recession. In late November 2008, the Fed started buying $600 billion in Mortgage-backed securities (MBS). By March 2009, it held $1.75 trillion of bank debt, MBS, and Treasury notes, and reached a peak of $2.1 trillion in June 2010. Further purchases were halted as the economy had started to improve, but resumed in August 2010 when the Fed decided the economy was not growing robustly. After the halt in June holdings started falling naturally as debt matured and were projected to fall to $1.7 trillion by 2012. The Fed's revised goal became to keep holdings at the $2.054 trillion level. To maintain that level, the Fed bought $30 billion in 2–10-year Treasury notes a month. In November 2010, the Fed announced a second round of quantitative easing, or "QE2", buying $600 billion of Treasury securities by the end of the second quarter of 2011. A third round of quantitative easing, or "QE3", was announced by the Federal Reserve in September 2012. The third round includes a plan to purchase US$40 billion of mortgage-backed securities per month. Additionally, the Federal Open Market Committee announced that it would likely maintain the federal funds rate near zero "at least through 2015." Economic
Impact:
Reality:
Since quantitative easing began in 2008, the U.S. economy has averaged less than 1% growth per year. In that same time period, the Fed increased the money supply more than 300%. It is not a question of if there will be inflation -- Instead, it is a question of when and how much?
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| National
Economic News:
U.S. stocks rose this week to end at record highs following solid corporate earnings and better-than-expected job gains in April. The Dow Jones Industrial Average and the Standard & Poor's 500 Index both rose to record highs, boosted by the jobs report. The Dow rose 142.38 points, or 1%, on Friday to close at 14,973.96. The index was up 1.8% for the week. The S&P 500 gained 16.83 points, or 1.1%, to 1,614.42. It posted weekly gains of 2%. The Nasdaq Composite Index rose by 38.01 points, or 1.1%, to 3,378.63. The index gained 3% for the week.
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| "Click Here" to view a Slide Show of Drought Monitor maps for the past 12 weeks | ||
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| Looking Ahead: | ||
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| Feedyard Closeouts: Profit/(Loss) |
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| Slaughter Cattle: |
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| Friday trading has been mostly inactive on light demand in all major feeding regions. Not enough sales for a market trend. In the Southern Plains on Wednesday live sales sold at 128.00, with a few in Kansas at 129.00. In Nebraska on Wednesday live sales sold from 128.50 to 130.50 and dressed sales on Thursday sold from 206.00 to mostly 207.00. In Colorado on Wednesday live sales sold from 130.00 to 131.00. In the Western Cornbelt on Thursday live sales sold from 128.50 to 130.00 and dressed sales sold from 205.00 to 207.00 mostly at 206.00. |
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| Weekly Overview: |
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| The average
live weight of cattle slaughtered in the Texas Panhandle for the week ending
04-27-2013 was 1230 lbs with 38 percent heifers compared to 1225 lbs and
40 percent heifers the previous week and 1228 lbs and 37 percent heifers
the same week a year ago.
Cattle Slaughter
under Federal Inspection:
Boxed beef cutout values were higher on Choice and weak on Select on moderate demand and light offerings. The Choice cutout reached a new all-time record. It increased $1.10 per cwt from the day before to $201.68 per cwt (versus $192.89 last Friday) while the Select cutout declined $0.51 to $190.13. The Choice-Select price spread was $11.55 per cwt (versus $8.46 last Friday). The reported spot boxed beef trade for the week was 548 loads of fabricated cuts, 15.3% lower than the 647 loads the week before. |
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| National Grain Summary: |
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| Grain and soybean
bids were mixed. Soybeans saw solid gains on tight supplies and light
farmer selling. Corn saw support from planting delays as the western
corn-belt got hit with snow and rain.
The robust result of the monthly Employment report sent the equity markets to record highs Friday, which in turn seemed to prompt widespread liquidation of commodity positions as investor concerns about inflation faded. Corn futures seemed to fall victim to that selling in the wake of recent gains. Indeed, profit-taking apparently hit the market despite price-supportive conditions. July corn slipped 0.75 cents to $6.6125/bushel at its Friday afternoon close, while December fell 5.5 cents to $5.535. In contrast to the grain losses suffered Friday morning, soybean futures rebounded from their mid-week decline. Bearish traders may have been taking profits on previously established short positions, especially with the old-crop situation remaining very tight. Otherwise, not a great deal had changed from Thursday. July soybean futures closed 15.0 cents higher at $13.8725/bushel Friday, while July soyoil leapt 0.78 cents to 49.27 cents/pound, and July soybean meal inched up $0.3 to $406.5/ton. Wheat futures sank Friday in apparent response to the results of the Wheat Quality Council tour of Kansas winter wheat fields concluded Thursday. Their crop estimate, at 313.1 million bushels fell well short of the average forecast stemming from the past five tours (at 341.3 million) and the actual 2012 figure (at 382.2 million). However, the result very likely exceeded earlier expectations, thereby rendering the market vulnerable to a setback. July CBOT wheat futures sank 7.5 cents to $7.21/bushel at its Friday settlement, while July KCBT wheat dove 13.25 cents to $7.78 and July MGE futures declined 5.25 cents to $8.19. |
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| Five Year Moving Average - Corn |
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| Your Suggestions: | ||
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Our goal is
for the Weekly Market Summary to provide a condensed, yet comprehensive,
overview of the week's cattle market. If you have a suggestion that
would enhance the summary, use the link below to submit your suggestion.
If we implement it, we'll send you a Cattle Range Knife as a token of our
appreciation.
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| Although the information contained in this Market Summary is from sources believed to be accurate and timely, THE CATTLE RANGE EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, AS TO THE ACCURACY OF ANY OF THE CONTENT PROVIDED, OR AS TO THE FITNESS OF THE INFORMATION FOR ANY PURPOSE. |
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