Compared to last week, feeder cattle and calves sold 5.00-8.00 lower with many instances fully 10.00 lower on all classes and as much as 15.00 lower on lightweight stocker calves. Mainstream feeder buyers collectively decided to drastically adjust the one cattle feeding variable that they have the most control over in an effort to stop the flow of red ink on closeouts.
Price levels started the week sharply lower with additional weakness tacked-on as the week progressed. By Wednesday, it appeared that the feeder cattle market had given up demand for lent as auction markets struggled to sell cattle even remotely close to recent weeks. In direct contrast to the demand situation just two weeks ago; when cattle prices are rapidly rising everybody wants in, when the market is tanking nobody even scratches their nose in fear that it may be perceived as a bid.
Extremely tight supplies of available feeder cattle could no longer hold the inflated market levels as feedlot managers struggle to sell fed cattle and packers struggle to sell the finished product despite a considerably reduced harvest schedule. Even lightweight stocker cattle and calves, that previously appeared to be resistant to bearish signals, fell victim to the down market. Demand may trump supply, but it still seems inevitable that the smallest cattle inventory in 60 years will outweigh our economy concerns and high feedcosts with a US population that is twice the size and a world population that is over two and a half times larger with a much improved infrastructure.
Something’s gotta give for fat cattle prices to break through the all-time record resistance point of 130.00 and feeder markets to surpass record highs established about this time last year. An export market rally could improve boxed beef cut-out values along with some relief from winter storms in the heavily populated northeastern seaboard that has slowed beef consumption and movement.
A good soaking throughout the Flint Hills and other major grazing areas not to mention the Corn Belt, as farmers approach planting season with world corn stockpiles appearing slightly larger than previously thought. A shift in the investment scene that causes fund managers to read fundamental cattle production data more literally. Any of these occurrences or the slight combination at any level could be enough to jumpstart feeder cattle prices back to record levels. Perhaps an increase in heifer retention would be enough to tip supply-side scales in the market’s favor.
At the Ogallala, NE Livestock Auction on Thursday, about five loads of fancy replacement quality heifers weighing 600-750 lbs sold from 148.00-150.25, which was a 10.00 premium and near the feeder steer market. Fed cattle sold mostly 2.00 lower on a live basis at 123.00 and 4.00 lower dressed at 196.00. This week’s reported feeder auction volume had 60 percent over 600 lbs and 42 percent heifers.