Compared to last week, feeder cattle and calf prices were uneven but mostly weak to 3.00 lower which marked the first week of predominantly lower cash feeder markets since late September. Pressure came early in the week with nearby CME Live Cattle futures closing down the allowable 3.00 limit, leaving producers and feeders puzzled as to why such a bearish signal came out of Chicago while fundamental factors remained so bullish on the home-front.
Analysts can point to a mild retreat in record boxed beef cutout values or disappointing monthly beef exports toward the end of a banner export year, but Monday’s sharp decline on the Board probably had more to do with a top heavy commodity that is overwhelmingly supported by speculating investment groups amid economic uncertainty with the holidays fast approaching. Feedlot replacements that are so tightly bound to the futures market saw a noticeable drop in demand near the Southern Plains feedlot region, but new Northern feeding interests continue to enter the market and held losses in check.
Farmer-feeders who suddenly have too much time on their hands have focused their briefly idled minds to offsetting row crop taxable gains by purchasing a feeding project. In Bassett, NE on Wednesday, buyers bid up nearly 650 head of top quality 6 weight weaned steer calves with an average weight of 636 lbs to an average price of 168.46. Lighter weight calf interest continues robust with help from the surprisingly lush winter wheat pastures in Oklahoma, following such prolonged drought suffering. But bitter cold temperatures are starting to set-in and wheat sprouts have a tendency to stall during cold snaps - if not try to crawl back into the ground altogether.
Wintry weather invaded the southern tier of the United States this past week with measurable snowfall in places like Las Cruces, NM; Midland, TX; and Little Rock, AR which have seen more snow so far this season than places like Fargo, ND; Milwaukee, WI; or Buffalo, NY. Most backgrounders are hoping that storms steer clear of their facilities as they are already assembling grass cattle for next spring as fears mount that stockers will be even harder to purchase than they are right now.
Pee-wee calves (under 450 lbs) were a few dollars cheaper this week, but a few dollars is hard to gauge when price levels are near 2.00/lb. Direct fed cattle trade was slow in developing this past week because of early week losses on December CME contracts. Boxed beef prices moved lower again this week as Choice closed near 4.50 lower on Thursday and 1.31 lower on Friday dropping 5.87 since last Friday’s close at 191.01 on Choice. All this played into this week’s lower fat cattle trade Friday afternoon as feedlots sold cattle 4.00 lower at 120.00 live in the Southern Plains and dressed sales in Nebraska were mostly 8.00 lower at 195.00. This week’s reported auction volume included 40 percent over 600 lbs and 42 percent heifers.