The cattle market rebound continued this week. Fed steer prices reached $136 to $137 per cwt last week, up $15 to $16 from the low posted in early October. Fed cash trade this week has not been established at this writing. Futures are higher with prices reaching a six-week high.
Carcass weights are still a concern. Steer dressed weights rose to a new record high at 928 pounds. As we mentioned previously, it looks like the cattle market has put in a low that will likely hold for some time, perhaps through 2016. Even so, prices are vulnerable to setbacks as the market works through the backlog of cattle and demand-related issues.
USDA will release the monthly Cattle on Feed report Friday afternoon. The report is expected to show lower placements and marketings versus year-ago levels. Feedlot placements during September are expected to fall 6% below a year ago and cattle marketed 3.3% lower, thereby putting the Oct. 1 Cattle on Feed total up 1.8% at about 10.165 million head. While up from a year ago, that figure would still be well below the five-year average for Oct. 1 at 10.65 million head.
The report will indicate how feedlots responded to the sharp decline in cattle prices, which triggered huge losses for finished cattle but provided an opportunity to purchase feeders at a much lower cost. In this month’s report, USDA will also include the number of steers and heifers on feed as of Oct. 1. Typically, heifers make up about 37%-38% of the mix, but with herd rebuilding underway, the percentage is down to 31% to 32%. It will be interesting to see if data indicates continued heifer retention.