Compared to last week, yearling feeder cattle and calves sold mostly 2.00-5.00 lower, with several auctions reporting yearlings trading from steady to 3.00 lower. In any event the word “lower” made its way into the markets this week. Yearling cattle, in a lot of cases, did not quite see the full decline as the calves did.
The week started out lower at the major markets, notably Oklahoma City and Joplin, pretty much set the stage for the rest of the week. Several auctions noted a high percentage of new-crop calves in the offering this week, as these soft un-weaned calves will find limited outlets as order buyers have already filled grass orders. Dry conditions in Central and Western Oklahoma, ranging down into Texas continue to take a toll on the feeder market. El Reno, OK noted in its sale that because of draught conditions a lot of heavy yearling cattle came to town that normally would sale next month.
On Tuesday of this week there was significant long liquidation selling in all the commodity markets, especially in the cattle and pork, but also grains, stock market, precious metals and crude oil were all pressured. There seems to be a little nervousness that when markets have raised so significantly that consumer demand could prove inadequate to handle rising food and energy cost as this puts extra demands on budgets. This week saw many areas across the Mid-West with farmers in the field planting corn which seasonally takes these buyers out of the market.
The boxed beef trade stayed on the defensive this week as it trended lower, with significant movement on Wednesday. The lower boxed beef trade did not help the cash trade on Thursday. Thursday’s trade in the Southern Plains saw live cattle trade 4.00 lower at 119.00, in Nebraska 4.50-5.00 lower at 119.00-119.50 and dressed sales 6.00 lower mostly at 190.00. Lack of support in the cash cattle trade took some of the steam away from the feeder cattle markets as buyers fell in line with the direction of the live cattle trade.
As we approach the Easter season we are seeing retailers featuring ham and also lamb. With the grilling season around the corner beef will be featured more. Seasonally slaughter numbers will go up and over the next few months cash prices are likely to see some decline. Fundamentally, the outlook still remains positive as beef exports are up with South Korea and Japan both major buyers, carcass weights continue to decline and feedlots are staying current. We still have tight supplies of feeder cattle and prices continue to be impressive. This week’s auction volume included 51 percent over 600 lbs and 48 pct heifers.