Compared to last week, steer and heifer calves which now by-far make up the bulk of the feeder offerings sold 3.00-6.00 higher with instances from 8.00-12.00 higher especially in the Western Mountain States where reputation high altitude ranch strings are making their way to town. True grass yearlings are now very scarce but traded from firm to 5.00 higher where available. The Southern Plains are reporting yearling-weight calves (that were drought displaced into growing yards) currently hitting the direct market and getting the cold shoulder from prospective feedlot buyers.
Due to hay shortages, these calves were fed a much hotter ration than usual putting them in a fleshy (fat) condition that promises an inefficient performance on full feed and a stalling-out at an immature and lighter weight. The loss of tonnage from these drought effected calf-feds could offer yet another bullish signal to the already testosterone induced spring fed cattle market that has April CME Live Cattle contracts trading at a 4.00 premium to the all-time record high. Out-front feeder cattle futures contracts are also running ahead of current cash levels with winter and spring delivery of 750 lb steers tickling 150.00. This has caused backgrounders to increase the throttle on their bidding hand, especially north of Interstate-70 where a hard frost fully encompassed that portion of the nation this week – bringing more consistent temperatures and more confidence in the health of new calf purchases.
While keeping an eye on cost per head, Western calf buyers settled on lighter weight calves with top quality steers weighing near 400 lbs topping 2.00/lb in Salebarns like Miles City and the Public Auction Yards (PAYS) in Billings, MT; Torrington and Riverton, WY; and Bassett and North Platte, NE. The Ogallala, NE Livestock Market was perhaps the most impressive this past week with nearly 400 head of fancy steers averaging 417 lbs and 208.41. Fed cattle sold 1.00-3.00 higher with live sales ranging 120.00-122.00 with the higher end of the range realized later in Thursday’s trading session and mostly in the North with the Board gaining ground as the Southern feeders pulled their hedges. By Friday afternoon, the cattle industry was intoxicated after a week’s worth of higher cattle prices on all classes – just in time for Friday’s surprisingly bearish cattle-on-feed report. Industry analysts overwhelmingly decided that September placements should be lighter than a year ago, considering the huge numbers of calves that entered the feedlot this summer. Wrong again, somehow placement totals for September totaled 100.2 percent of last year while on-feed inventories were larger than the same time the previous year (104.9 pct) for the 17th straight month. September sales of market-ready cattle were precisely forecasted at 100.6 percent of 2010. This week’s reported auction volume included only 32 percent over 600 lbs and 42 percent heifers.