Compared to last week, calf prices were higher again this week but the trajectory of the gains was noticeably flatter. Feeder calves sold firm to 5.00 higher than the previous week’s sharp gains with instances as much as 10.00 higher on several classes, including top quality 6 weight heifers that continue to find increased competition from replacement buyers and steers under 550 lbs which are always the favorite of backgrounders.
Many major auction markets were just getting back to business, following the holidays, and fully realizing the New Year gains that mid-to-late week markets noted last week. Hence, some individual auction trends were more sharply higher than the nationwide trend that already accounted for the market improvement during the first full week of 2012. In fact, there were actually signs of weakness noted at some late week sales – especially on the droves of heavier calves (over 700 lbs) that were supplemented and carrying excess flesh due to the lack of wintry weather during this mild start to the winter season. A midweek cold snap did come down from Canada and remind the Midwest and Northern Plains of the calendar with sharply lower temperatures. Much of Texas received much needed moisture this week with Midland/Odessa posting 10 inches of snow and heavy rains in south Texas.
This month’s USDA Supply and Demand report for January caused a limit-move on nearby CBOT corn futures for the fifth straight year. This time, corn contracts lost the allowable daily 40 cents on Thursday as ending stocks came in 97 million bushels above pre-report estimates. The report implied much smaller feed usage, since changes in other sources of disappearance mostly offset each other. Cattle feeders are going to need input cost relief somewhere if recent purchases stand a chance of holding their money together. Feeder cattle prices are at their highest point, yet feedlots are working to fill needs as supplies are bound to become tighter and much more quickly than in recent years. Nebraska prices continue be out-front with orders pouring in for replacement quality heifers, which consequently improves the demand for both heifers and steers of similar weights. Several consignments of 600-850 lb heifers were sold for keepers in Bassett, NE on Wednesday including a load weighing 612 lbs at 212.00 and another pot load of 840 lb fancy girls at 177.00. The next day in Valentine, NE the weighted average price on over 330 head of top quality 500-550 lb steers officially broke 2.00/lb which many consider to be a major breaking of a resistance point on the benchmark calf class. Fed cattle sold mostly 2.00 higher from 123.00-124.00 as feedlots struggle to hold their ground while staring at CME Feeder futures for late summer at 156.00. This week’s reported auction volume had 49 pct over 600 lbs and 42 pct heifers.