Feeder cattle review: Fed cattle trade disappoints on low demand

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Compared to last week, feeder cattle immediately bound for feedlots sold weak to 3.00 lower with the full decline on weights over 800 lbs.  Middle-weight calves and feeders weighing 500-700 lbs with an average to fleshy condition that forces them into some kind of confined feeding facility sold largely steady. 

Meanwhile, stocker cattle and all calves weighing under 500 lbs traded firm to 5.00 higher especially throughout the Southeastern calf markets where orders are starting to pour-in from the West as unseasonably warm temperatures and spots of moisture in drought areas have grass grazers thinking spring. 

Last week’s cash feeder market rally did not carry into this week as cattle feeders are simply punch drunk from continued losses on their finished cattle closeouts.  It’s not the cattle’s fault, performance has been outstanding for two years now and weight-gains are well above the historical averages but feedcosts have eliminated the chance for profits. 

Most industry members assumed that by now the fed cattle market would have broken through the 130.00 record-high resistance level and tighter supplies would have created a seller’s market. Not even close, this week’s direct fed cattle trade was steady to 1.00 lower at 125.00 on light demand and movement with a chain speed of less than 600,000 this week which is very unusual other than in instances of holidays or plant breakdowns. 

This was the first full week of darkness at Cargill Plainview, yet boxed beef cut-out values struggled again this week and continue to hover near 180.00.  Despite the bearish tone of the fed cattle and beef markets, backgrounders remain bullish with the bulk of the southern tier of the United States now quoting steers and bulls under 450 lbs up to 2.00/lb and beyond.  The availability of the lightweight calves was more plentiful this week with heavy offerings of froze-out calves showing up in town as owners are short of hay and attempting to prepare their cows for calving. 

Many of the industry officials were in Tampa, FL for the annual NCBA Convention this week; it is likely that feedcosts, hay supplies, drought, diminishing cattle numbers, and mounting feedlot losses were main topics of conversation.  This week’s reported auction volume included 60 percent over 600 lbs and 42 percent heifers.



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