![]() “The change in weights may change the number and timing of feeder cattle from South Dakota included in the index. Prior to that, the feeder index reflected steers weighing 650-849 pounds. The value of feeder cattle, and the resulting prices, reflect the feed and feeding costs involved in finishing cattle.īeginning in November of 2016, the feeder index reflects feeder steers weighing 700-899 pounds. “If a forward bid is less than a basis-adjusted futures price, then a producer could negotiate for a more favorable bid,” he said. He explained that with an expected basis, forward bids for cattle can be compared to what would be likely using futures contracts for different months. “Expected basis should be adjusted if seasonality in futures is significantly different than in other years,” Diersen said. The latest five-year average fed cattle basis for South Dakota, by month, ranges from above $5 per hundredweight in May to less than $5 per hundredweight in December (see Figure 1). Thus, to cover typical variability in basis, a 5-year average basis could be used for planning purposes,” he said. “Despite these factors, the impact on basis going forward is not expected to be significant for the same quality of cattle. Looking at 2016 numbers, Diersen noted that there was a discount implemented for delivery on the October contract at SFRL in Worthing. The SFRL prices and basis levels include cattle with yield grades of 2-4, slightly wider than the futures specifications of 2-3. In other months, such as September through December, the basis is often negative, reflecting the transportation cost to slaughter markets. ![]() “The historically prevalent pattern in fed cattle prices is readily seen in the basis,” he said.įor example, Diersen explained that the basis in May is often positive, reflecting an expectation of lower cash prices during June. “The basis can be monitored for any localized price changes and to arrive at an expected price level to use for planning purposes,” Diersen said.īasis is the difference between the cash price and the nearby futures price. He explained that the SFRL price can also be compared to the Live Cattle futures price. “Generally, the SFRL price for fed cattle tracks or is similar in level and changes with the five-area price, a national benchmark,” Diersen said. The 2019 annual price forecast was lowered to $140-$151 on slightly higher anticipated feed costs and continued large feedlot numbers.The only Agricultural Marketing Service reported location with fed cattle sales in South Dakota is the Sioux Falls Regional Livestock market. “The higher number of cattle already in feedlots may limit the competition from feedlots for ownership of these calves, and higher feed prices may limit feedlot management’s willingness to pay higher prices for calves,” say ERS analysts.ĮRS left the projected fourth-quarter feeder steer price unchanged from the previous month at $151-$155/cwt. The estimated percentage of cattle on feed for more than 150 days in October was around 17%, which was approximately 3% more than last year slightly above the average for 2013-2017, but less than in 2016. “In addition, cattle are staying on feed longer than last year.” While this may be a positive sign for feeder calf prices in the coming months, limiting factors are the record numbers of cattle already on feed at the beginning of October and expectations of higher feed prices,” say analysts with USDA’s Economic Research Service (ERS). “Winter forage seems to be in better condition than last year, which could provide a home for these calves to stock over the winter. 1-cattle available to place on feed- was 30.1 million head, just 0.6% more than a year earlier, according to the most recent monthly Livestock, Dairy and Poultry Outlook. The estimated number of cattle outside feedlots Oct. The Dow Jones Industrial Average closed 208 points higher. and China were inching closer on trade talks. financial indices closed higher Thursday, buoyed by tech stocks and reports that the U.S. Wholesale beef values were firm on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.Ĭhoice boxed beef cutout value was 39¢ higher Thursday afternoon at $213.55/cwt. Other than 35¢ lower in expiring Nov, Feeder Cattle futures closed an average of 85¢ higher. Other than 20¢ lower in the back contract, Live Cattle futures closed an average of 27¢ higher. beef-implemented in the wake of BSE discovered here in 2003. Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.Ĭattle futures gained a little ground, with some attributing part of the strength to rumors that Japan will remove its age restriction on U.S.
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