Compared to last week, yearling feeder cattle sold mostly steady to 1.00 higher with most of the slight gains seen in Southern Plains direct sales. Steer and heifer calves traded steady to 3.00 lower with the bulk of this week’s transactions on plainer quality consignments offered in smaller lots with no pedigree or reputation.
The onset of summer put additional pressure on lightweight calves (under 450 lbs) which sold as much as 10.00 lower in many Southeastern markets, but this was only a small percentage of their value with price levels still near 200.00 for males. The bulk of this week’s feeder market does not reflect the effects of CME cattle boards cratering on Wednesday, and again on Thursday for feeder contracts which lost over 5.00 the latter part of the week.
Packers took advantage of the lower Board as fat cattle sellers gave up more market position than they pocketed in basis. Direct slaughter cattle sales ended up 3.00 lower in the Southern feedyards at 119.00, while Northern feedlots sold 4.00-5.00 lower from 118.00-119.50 and mostly 191.00 dressed. This defeat is also yet to be realized and could adjust yearling prices through fall as the industry knew that the fed market would fade in early summer, but now we know from what point.
Out-front sales of grass yearlings are still trading slightly higher than current delivery loads, but the premium is quickly narrowing and if it doesn’t start raining in the Corn Belt these markets could invert. Reportedly, a good portion of the late summer and early fall feeders are still in firm hands and these backgrounders plan on squeezing until the turnip is dry. Fortunately, the weather patterns seem to have changed for the good with rain clouds stirring much more regularly across the Midwest.
This week’s supply and demand report kept corn crop estimates status-quo for the time being and lower feedcosts are still the cattle market’s best chance to spread its wings once again. Nebraska and Iowa farmer-feeders were noticeably more reserved in their feedlot replacement buying this week, but enthusiastic bidding may only be a few more inches of rain away and could culminate at upcoming at summer grass yearling auction specials. On Wednesday at the Huss-Platte Valley Auction in Kearney, Nebraska, over 450 head of top quality 900-925 lb steers sold with an average price of 153.20. That’s asking these cattle to back-up 32.00 and still show a profit in the summer heat when they’re starting out on top of 900 lbs, which is a tall order. This week’s reported auction volume included 51 percent over 600 lbs and 44 percent heifers.