CME: Cash Fed Cattle Prices in W48/2018 Modestly Higher
via The Cattle Site - 05 December 2018
US - Cash fed cattle prices last week were modestly higher compared to the previous week, reports Steiner Consulting Group, DLR Division, Inc.
The comprehensive cattle report that was issued yesterday by USDA should offer some interesting insights in terms of fed cattle purchased for delivery in early December vs. later in the month.
In the report that was issued a week ago, we noted that packers paid a notable premium for cattle available for immediate delivery.
Will that happen again this week? Or did feedlots manage to close the gap and trade cattle closer to where Dec fed futures are currently trading?
In yesterday’s recap of fed cattle trading, USDA noted: "The latest established market in any feeding region was last week, with live purchases in the Texas Panhandle mostly at 118.00, with a few up to 118.50. Last week in Kansas, live purchases traded at 118.00.
"Last week in Nebraska, live purchases traded from 116.00-118.50 with dressed purchases from 183.00-185.00, For the previous week in the Western Cornbelt, live purchases traded from 114.00-116.00 with dressed purchases from 183.00-186.00."
December fed cattle futures are currently below current fed cash market, maybe reflecting market uneasiness about demand after holiday purchases are completed. However, it does appear that feedlots have managed to stay current despite more fed cattle on feed.
The charts below show both the average weight of fed steers coming to market as well as the percentage of yield grade 4 & 5 cattle in the mix.
The latest steer weight data is for week ending 13 November, showing the average weight was 900 pounds per carcass, 4 pounds lower than the week before and now 2 pounds under what they were a year ago.
However, with cattle placed on feed at lighter weights last spring maybe the carcass weights at slaughter may not be the best measure of currentness.
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