Well we survived another week. The week that started out with a massive destruction to the oil market, and ended without much drama. The stock market was down about 60 on the week, basis the S&P, while oil ended down about $7 a barrel from the week before.
The cattle futures were volatile, but ended the week only $3-$4 lower than they started, basis the June and Aug live cattle futures. The feeder cattle futures on the other hand were actually $.90 higher on the week in April, $2 lower in May, and $1.90 lower in Oct. So for all the motion we ended the week relatively unchanged.
The big news on the end of the week was the Cattle on Feed report. Placements were 77% of a year ago, while Marketings where 113% of a year ago. This placement number is the lowest in the USDA dataset, to go along with a marketings number that is second highest in the US dataset. The placements and marketing numbers leave cattle on feed at 11.297 hd of cattle in large feedlots, (1000+ hd). That is down 5.5% from a year before.
Steers placed were down 361,000 hd,(-4.5%), while heifers were down 295,000 hd,(-29.5%). A lot of heifers just ended up getting turned out to green grass, the debate will be, is this the next start of herd expansion, or will these heifers come to town eventually as market animals, when the market, or weather conditions change.
This week has also been a week of really light direct cash cattle trade, from feedlot to packer. Friday there was some in Texas at $95, that is about $10 lower than last week's averages. Earlier in the week there were trades as high as $100.
Boxed beef closed what they would call, "sharply higher," $9 higher on the choice, and the select gained another $6. Choice-Select Spread is sitting at $14.35 to end the week. Estimated cattle slaughter is 80,000 for Friday, down 4000 on the week, and 31,000 lower on the year. The estimated number for Saturday Kill is 47,000 hd, up 12,000 for the week, and down 4000 for the year. That brings total Steer and heifer slaughter for the week to 354,000, 26,000 hd lower than last week, and 158,000 hd lower than last year. Non- Fed slaughter was down 7,000 hd on the week, and 10,000 hd on the year.
All in all it wasn't a bad week. Daily slaughter levels will be once again the most important news of the week next week. Nobody really knows what that is going to look like, we have some plants that are just going into temporary closedowns, and some, like JBS Greeley just coming out. Greeley is a big one, they can carry a lot of weight, so it would be nice to see them back up and running.
Get ready for our sale on 5/6/2020. We are featuring back to grass type of cattle. Also, check me out of a new weekly market report that I am doing with the Burning Daylight Podcasts.