Cash fed cattle traded steady to $2 higher last week while boxed beef prices held mostly steady, Cattle feeding margins saw improvement as a result of the higher cash, but feedyards continue to lose money on cattle as supplies are increasing. Composite boxed beef prices have climbed $9 per hundredweight over the past month while cash cattle prices have fallen about $6 per hundredweight. The result has been a significant improvement in beef packer margins while cattle feeding margins have slipped further into the red.
Boxed beef cutout values finished the week up only slightly from the previous week. Choice boxed beef traded Friday at $190.29 per hundredweight, up 2 cents from the previous Friday. The Select price on Friday was $186.11 per hundredweight, an increase of 6 cents from the previous week. The Choice-Select spread was $4.18 per hundredweight, compared to $4.22 the previous week.
Feeder cattle prices were steady to $3 lower at auction last week, while calves found bids $3 to $8 lower. Offerings of stocker and feeder cattle are slowing and the quality of cattle in the ring is consistently lower than earlier in the season.
Buy orders for calves are spotty, “with many (buyers) preferring steers over heifers,” says USDA Market News Reporter Corbitt Wall. “Quality of feeder cattle coming into the auctions is very uneven with many carrying flesh and many plainer type cattle in the offering. The higher quality calves with a vaccination program are still being readily absorbed with good demand.”
Wall noted that sharp losses in the futures market the previous week at the CME driven by the discovery of a BSE-infected cow discovered in California were “reclaimed on Thursday as live and feeder cattle futures closed with near limit gains.”
Last week’s auction receipts totaled 168,400 compared to 161,800 the previous week and 197,100 last year. Direct sales of stocker and feeder cattle totaled 25,500, with video/Internet sales at 25,500. The weekly total was 219,400, compared to 262,000 last year.
Slaughter cows sold steady to $4 higher as demand for lean trimming beef increased. Corn prices were steady to higher for the week, with Omaha cash corn at $6.37 per bushel on Friday, 6 cents per bushel higher than the previous week.