Feeder cattle marketing was brisk for the first full week of 2013 which annually posts the heaviest auction receipts of the entire year. Compared to the last full non-holiday week of sales, feeder cattle sold firm to 5.00 higher with steer and heifer calves selling 3.00-10.00 higher.
The weather was accommodating in most major production areas with sellers anxious to get cattle off their grocery bill in the new tax year and buyers actively bidding to fill orders that were low on inventory after the holiday break. Despite lighter numbers of available feeder cattle and producers selling cattle ahead of schedule, auction receipts for the busiest week of the year were only 7 percent lighter than the same week a year ago. Undoubtedly, this volume was aided by cow/calf operations selling calves that normally don’t sell until much closer to spring and by wheat pasture grazers pulling cattle off barren fields.
Average feeder cattle prices were very comparable to a year ago with Northern Plains markets falling just a few dollars short and Southern Plains locations slightly higher, while the Southeastern region quoted popular calf weights from 3.00-8.00 higher than a year ago. Trading was very active for all classes, but mounting pressure from lower CME cattle futures started to limit gains toward the end of the week (especially on direct country sales that are tied much closer to the Board).
Beneficial moisture moved across the country late this past week with the eastern half of the United States enjoying unseasonably warm weather and spotty rain showers, while the western half shivered under a cold front and heavy snowfall in the northwestern states. Producers are already hoping for an early spring with hay piles quickly evaporating and winter pasture almost nonexistent. Naturally, demand is expected to improve progressively for stocker calves as we move closer to spring but feeder cattle prices are also expected to advance.
Despite the shortage of feed, the CME Feeder Cattle futures are posting at least a 5.00 increase in the value of a 750 lb steer before the next corn crop comes in. The fed cattle outlook has been tempered a bit in the last several weeks, but most still expect the all-time record high of 130.00 to be broken by the end of the first quarter. If feeder cattle offerings dry-up in late winter and early spring like many market members expect they will, there could be more room for late spring and summer fed markets to grow.
On Monday at the feeder cattle auction in Russell, Iowa a load of 964 lb steers brought 141.60 which leaves little time to back those cattle into a profit before they finish. Fed cattle prices lost 2.00-3.00 through the week’s trading to close at 126.00 live and 202.00-203.00 in the beef. There were 334 contracts of CME December Live Cattle deliveries that were made on a live basis and graded by USDA Livestock Market News personnel finished-up this week. February is also lining up to be a delivery month with the Board trading at a premium to cash and April several dollars higher. This week’s reported auction volume included 57 percent over 600 lbs and 41 percent heifers.