Live Cattle Cash Prices

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PLAINS MARKET TALK   Cash Cattle.   Packers waited until Friday's futures had closed and then began the end of the week ritual of cattle procurement. Some owners, who were holding for $125, were forced to cave to $123 once some trade at that level developed but prices remained $3 above the previous week. Dressed prices were mainly at $195 also $3 higher than the previous week. Packers received some help from a weak cattle future's market.

  Secretary Purdue announced that market reporting by USDA will continue during the government shutdown. This is contrary to last time this occurred and everyone will be watching to see how this develops. Meat inspection continues during a shutdown.   Weather entered the picture over the weekend. Snow and high wind created blizzard conditions in much of the upper plains and midwest.      Cattle Futures.

Futures opened higher, then fell to triple digit losses and recovered on the close to post modest losses. Thoughts of the impact of a government shutdown on cattle deliveries loom in the background.   The past week was one characterized by new buying, not driven by news in the cash markets or the box prices, but instead by investment money forming opinions of future prices based on information and theories beyond the limited fundamentals of the beef market.

This is what makes a market and certainly what makes trading a complex market like cattle difficult.    Carcass weights are released each Thursday and are a closely watched barometer indicating the position of cattle feeders in the nation's feedlots. The last report released for the week of January 6th, had steer carcass weights down 2# at 900# which is 5# below prior year. Heifers were 10# over last year with more heifers in the mix.

Cold weather never fails to impede live performance even when unaccompanied by moisture.   Forward Cattle Contracts: Trading for forward bought cattle has been very light since the first of the year. This means packers have fewer forwards to protect inventory needs but it also means more cattle available from weekly show lists.         The weekly breakdown of fed cattle moving to the beef processing plants is as follows.

1) formulas 55%; 2) negotiated 20% [both live and flat dressed]; 3) forward contracts 25%. Some of the formula arrangements are week to week negotiated prices and not committed cattle to one plant.   The Cutout. The cutout was soft in end of the week trading. The weekly slaughter inched up to 615,000 from 611,000 the previous week. The choice/select spread is narrowing as seasonally occurs in most years.

The spread has moved from $20 to $5 in the past few weeks.   Beef Feature Activity Index. Beef features are often planned months in advance. Retailers look at the pricing of live cattle futures for signals of product availability and price. Beef specials serve as drawing cards into the stores and are profit centers. This new link provides perspective on the level of feature activity week by week in the country.

  Cutout Values as of Friday, January 19, 2018 Choice Cutout Choice Price Change 204.86 Down $0.83 Select Cutout Select Price Change 200.16 Down $0.71 Choice/Select Spread 4.70   Replacement markets   Heavy movements of feeder cattle are moving into mostly full feedlots. The rally in feeder futures is supporting replacement prices but most feedlots of wary of jumping into the market at these prices for replacements.

The cash index is lagging the large gains posted by the feeder board.   Weather is increasingly becoming a factor in both feedyard and grazing placements. The central to southern plains are suffering from a lack of moisture. Dry land wheat fields are depleted of grazing forage and forced movement has come early this year.      Oklahoma City. The market continued a downward track this past week.

Demand was good for light calves with the most weakness in heavy yearlings.   Feeder futures. Attention now turns to the cash settlement for the January feeder cattle contract. With mandatory price reporting continuing the cash settlement should occur on January 26 as scheduled.            Feeder Cattle Cash Index. The index now will closely track cash prices into expiration of the January contract, however the index is lagging the runaway prices on the feeder board.

           Forward cattle contracting. Feedlots are featuring out front purchases for March through May at discounts to the board prices varying from Par to $3 under depending on location, quality and delivery point.    The National Weekly Feeder Summary released on Friday of each week tracks the national prices by region for last week.      Corn futures. Corn prices posted modest gains at week's end.

The basis, currently at 45 over the March board in Guymon, Oklahoma. Corn is now pricing into rations at $7.10 cwt. in the Oklahoma Panhandle.       CONCENTRATION OF BUYING FOR THE NATION'S FEEDING CAPACITY     The trend over the past twenty years of more concentrated ownership of the nation's feedyard has been obvious. The players may change but the trend has not and today the largest feeding firms control more feeding capacity that at any time in the history of cattle feeding.

Uniform and efficient systems are applied to the finishing of cattle and the rule of scale allows those costs to be absorbed by larger numbers of cattle in multiyard companies.   The sale of the Five Rivers cattle feedyards assures the trend will continue. Five Rivers is a giant feeding company and some thought the sale would break up its size into different purchasers but that didn't happen and Five Rivers will continue to dwarf the other feeding companies and will play a major role in price determination for replacement cattle across the country.

  Procurement at the nation's largest feeding operations is not uniformly applied. Some feeding companies choose a centralized buying operation with one buying staff controlling the purchases for all the feedyards. Other operations feature a decentralized buying format with the people at each feedyard location, usually the manager, handling the buy. Each operating mode offers its own advantages and weaknesses.

Centralized buying tends to discount the value of business to business relationships and focuses on price. Decentralized buying allows local buyers to see and understand and relate to both local conditions in their area and form trust relationships with the producers in the area.   Most operations mix the buy between spot transactions bought for current delivery and forward contracts bought for future delivery months.

Forward contracts are mostly purchased on Basis trades to the appropriate feeder cattle contract. The basis bids can vary widely between firms and there is little in the way of transparency of what basis levels are for certain months. The reason for a lack of transparency is simple. There is a lot of variance between groups of cattle offered for sale. The background, implants, feeding regime, medicine program, and flesh and quality all go into formulating the value of each group and those factors can change the Basis level several dollars.

  There also is a large difference between the feeding companies in the ownership of the cattle. Some feeding companies are managed to feed for outside customers and others only feed their own cattle and many others feature a combination of both. The trend over the years has been towards the ownership of cattle being in the hands of the feeding firm. The customer business is a tough one with sales people often overpromising results and under-delivering.

  The wildcard in the future will be how closely cattle feeding becomes integrated with beef processing. Many of the feeding companies today market their cattle through formula arrangements with the packers. While none of the processors now currently own or operate feedyards, a closer financial sharing of margins in feeding and processing is possible. Closer integration between processing and feeding will allow processors to target consumer products with expressed preferences that require traceback of the cattle through the beef pipeline.

      CATTLE REPORT LIBRARY Below are links to articles published in the Cattle Report pertaining to industry change.   The Case for National ID for Cattle   Reforming the Futures Contract and Cash Trading of Cattle   Australia and Distributed Ledgers   Blockchains and Smart Contracts   NOTE TO READERS   Sections of the newsletter are redesigned with hyperlinks to the appropriate source pages.

The hyperlinks are in light blue within the report.         FURTHER NOTES AND EXPLANATIONS OF BREAKEVEN/CLOSE OUT TABLES   Regional differences in grain and cattle basises create a difficulty in modeling a national composite for current close outs or a proforma forward look at a breakeven. Readers should consider your own area for adjustments to these models.      CURRENT BREAKEVEN PROJECTION The Cattle Report introduces the FEEDER METER.

The report estimates profit or loss for currently purchased feeder steers and projects a result 150 days out.  The chart is interactive and updated every 15 minutes in real time based on changes in futures markets in grain and cattle. Corn basis information is based on current trade prices adjusted every two weeks. Feeder prices and fed cattle sales are par the appropriate futures contract. INPUTS TOTAL$ $CWT 750 # Feeder Steer 1,109.

25 147.90 Cost of Gain 600 pounds 422.61 0.70 Estimated Interest(Prime + 1%) 30.77   Current Breakeven 1,557.42 115.36 Current Futures 1,521.45 112.70 Net Profit / Loss -35.97 -2.66 CURRENT CLOSE OUT The Cattle Report estimates current profit or loss on cattle placed on feed 150 days ago. This report generated from industry averages attempts to simulate a typical close out based on prevailing purchase prices for a feeder steer 150 days ago.

The close out assumes grain was purchased at market each month. Selling prices and interest rates are based on prevailing benchmark quoted prices. This chart will change weekly. INPUTS TOTAL$ $CWT 750 # Feeder Steer OKC 150 days ago 1,155.00 154.00 Cost of Gain 600 pounds 469.09 0.78 Estimated Interest(Prime + 1%) 27.12   Resulting Breakeven 1,651.21 122.31 Current Texas Panhandle Cash 1,657.80 122.

80 Net Profit / Loss 6.59 0.49     Click here to "Check out the markets "Click Here to send your comments  

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LM_CT115 St Joseph, MO Mon Jan 22, 2018 USDA Market News Service NATIONAL DAILY DIRECT SLAUGHTER CATTLE - NEGOTIATED PURCHASES - Summary Roundup for: Friday, 01/19/2018 On Friday trade was moderate on good demand in all feeding regions. Compared to last week in the Southern Plains and Colorado live purchases traded 3.00 higher at 123.00. Compared to last week in Nebraska, live purchases were 3.00 higher from 122.

00- 123.50, bulk at 123.00. Dressed purchases traded 3.00 higher at 195.00. In the Western Cornbelt, compared to last week, live purchases traded 2.00-3.00 higher from 122.00-123.00, few up to 124.00. Dressed purchases traded 3.00-5.00 higher at 195.00. Domestic source only. Live sales based on net weights FOB the feedlot after a 3-4% shrink. Dressed sales based on hot carcass weights delivered to the plant.

NEGOTIATED CASH: Confirmed: 97,013 Week ago: 7,944 Year ago: 3,229 Week to Date: 98,591 Week ago: 102,674 Year ago: 123,448 NEGOTIATED GRID BASE: Confirmed: 9,069 Week ago: 884 Year ago: 3,043 Week to Date: 14,650 Week ago: 13,447 Year ago: 13,335 NEGOTIATED CASH SALES (Includes all transactions regardless of delivery day) Head Wtd Avg Avg Wt Wtd Avg Price Wtd Avg Count Dress Pct Range Weight Range Price STEER - LIVE - FOB Over 80% Choice 15,505 63.

1 1,150-1,640 1,498.3 119.00-125.50 122.92 65 - 80% Choice 9,035 62.8 1,260-1,585 1,441.8 122.00-124.50 122.91 35 - 65% Choice 3,537 63.1 1,180-1,575 1,346.0 121.00-123.50 122.89 0 - 35% Choice - - Total all grades 28,077 63.0 1,150-1,640 1,460.9 119.00-125.50 122.91 STEER - DRESSED - DELIVERED Over 80% Choice 13,009 63.2 802-1,031 938.1 192.00-197.00 194.88 65 - 80% Choice 3,853 63.3 778-966 909.8 194.

00-195.00 194.93 35 - 65% Choice 114 64.2 855-864 858.1 195.00-195.00 195.00 0 - 35% Choice - - Total all grades 16,976 63.2 778-1,031 931.1 192.00-197.00 194.89 HEIFER - LIVE - FOB Over 80% Choice 13,611 62.8 1,150-1,550 1,364.2 121.00-125.00 122.77 65 - 80% Choice 4,581 63.0 1,100-1,450 1,274.8 122.00-123.00 122.92 35 - 65% Choice 1,684 63.1 1,165-1,375 1,266.4 122.00-123.50 122.98 0 - 35% Choice - - Total all grades 19,876 62.

9 1,100-1,550 1,335.3 121.00-125.00 122.82 HEIFER - DRESSED - DELIVERED Over 80% Choice 6,920 63.3 756-1,035 859.5 193.00-195.00 194.98 65 - 80% Choice 1,211 62.9 716-890 829.6 195.00-195.00 195.00 35 - 65% Choice - - 0 - 35% Choice - - Total all grades 8,131 63.2 716-1,035 855.1 193.00-195.00 194.98 MIXED STEER/HEIFER - LIVE - FOB Over 80% Choice 5,789 63.1 1,225-1,500 1,400.4 119.00-125.25 122.95 65 - 80% Choice 4,289 63.

0 1,175-1,450 1,324.9 122.00-123.50 122.81 35 - 65% Choice 1,152 63.0 1,220-1,400 1,317.2 123.00-123.50 123.15 0 - 35% Choice - - Total all grades 11,230 63.0 1,175-1,500 1,363.0 119.00-125.25 122.92 MIXED STEER/HEIFER - DRESSED - DELIVERED Over 80% Choice 4,338 63.0 741-971 870.5 192.00-196.00 195.09 65 - 80% Choice 1,337 62.9 768-946 862.0 194.00-195.00 194.90 35 - 65% Choice 12 63.0 850-850 850.

5 195.00-195.00 195.00 0 - 35% Choice - - Total all grades 5,687 63.0 741-971 868.5 192.00-196.00 195.04 ALL BEEF TYPE STEERS AND HEIFERS - LIVE - FOB Total all grades 59,183 63.0 1,100-1,640 1,400.2 119.00-125.50 122.88 ALL BEEF TYPE STEERS AND HEIFERS - DRESSED - DELIVERED Total all grades 30,794 63.2 716-1,035 899.5 192.00-197.00 194.94 DAIRYBRED STEER/HEIFER - LIVE - FOB Over 80% Choice 62 58.3 1,375-1,375 1,375.

0 81.50-85.00 83.31 65 - 80% Choice - - 35 - 65% Choice - - 0 - 35% Choice - - Total all grades 62 58.3 1,375-1,375 1,375.0 81.50-85.00 83.31 DAIRYBRED STEER/HEIFER - DRESSED - DELIVERED Over 80% Choice 1,553 59.3 768-840 814.1 158.00-160.00 159.71 65 - 80% Choice 44 59.5 819-840 833.3 160.00-160.00 160.00 35 - 65% Choice 78 59.0 767-811 788.5 156.00-160.00 158.05 0 - 35% Choice - - Total all grades 1,675 59.

3 767-840 813.4 156.00-160.00 159.64 MIXED STEER/HEIFER/COW No Reportable Trade. NEGOTIATED GRID BASE PRICE SALES: FINAL NET PRICES TO BE DETERMINED LATER AND SHOWN ON THE LM_CT109 FORMULATED PURCHASES REPORT (Includes all transactions regardless of delivery day) Head Wtd Avg Avg Wt Wtd Avg Price Wtd Avg Count Dress Pct Range Weight Range Price STEER - LIVE - FOB No Reportable Trade. STEER - DRESSED - DELIVERED Over 80% Choice 2,744 63.

0 690-1,011 906.6 192.00-197.00 194.63 65 - 80% Choice 547 63.6 819-945 859.0 190.00-198.00 195.07 35 - 65% Choice 498 64.4 733-949 845.2 193.00-195.75 195.01 0 - 35% Choice - - Total all grades 3,789 63.3 690-1,011 891.6 190.00-198.00 194.74 HEIFER - LIVE - FOB No Reportable Trade. HEIFER - DRESSED - DELIVERED Over 80% Choice 957 62.4 732-899 838.9 193.00-198.00 195.17 65 - 80% Choice 977 62.8 748-928 793.

6 192.00-195.50 194.72 35 - 65% Choice 201 65.6 715-825 785.0 195.50-195.50 195.50 0 - 35% Choice - - Total all grades 2,135 62.9 715-928 813.1 192.00-198.00 194.99 MIXED STEER/HEIFER - LIVE - FOB No Reportable Trade. MIXED STEER/HEIFER - DRESSED - DELIVERED Over 80% Choice 1,561 62.6 777-945 850.7 190.00-198.00 195.08 65 - 80% Choice 475 62.1 793-929 860.2 191.00-196.00 193.62 35 - 65% Choice 46 64.

2 924-924 924.5 195.00-195.00 195.00 0 - 35% Choice - - Total all grades 2,082 62.5 777-945 854.5 190.00-198.00 194.74 ALL BEEF TYPE STEERS AND HEIFERS - LIVE - FOB Total all grades - - ALL BEEF TYPE STEERS AND HEIFERS - DRESSED - DELIVERED Total all grades 8,006 63.0 690-1,011 861.0 190.00-198.00 194.81 DAIRYBRED STEER/HEIFER - LIVE - FOB No Reportable Trade. DAIRYBRED STEER/HEIFER - DRESSED - DELIVERED Over 80% Choice 595 59.

8 775-899 807.1 146.00-167.00 153.82 65 - 80% Choice 294 58.3 800-825 806.6 138.00-142.00 140.70 35 - 65% Choice 76 60.2 803-803 803.7 167.00-167.00 167.00 0 - 35% Choice - - Total all grades 965 59.4 775-899 806.7 138.00-167.00 150.86 MIXED STEER/HEIFER/COW No Reportable Trade. NATIONAL - All States Source: USDA Livestock, Poultry & Grain Market News Division, St. Joseph, MO 816-676-7000 email: stjoe.

lpgmn@ams.usda.gov www.ams.usda.gov/market-news/livestock-poultry-grain 1130C .

Hazel Gordon

Saving cash may be the main concern for anyone or retail business, and the easiest method to accomplish this is to find marketing at low cost.