Feeder cattle review: On feed report neutral to slightly bearish

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Compared to last week, yearling feeder cattle sold mostly steady with some major markets wavering in either direction but rarely more than 2.00.  Steer and heifer calves traded steady to 3.00 lower with the Southeast and surrounding areas posting the only good test as production areas farther north and/or west simply don’t do enough fall calving to test new-croppers this time of year, and old-crop stockers are long gone. 

More favorable weather conditions for hay and row-crop farming had many producers busy in the field which limited calf demand.  Upper Midwestern Corn Belt farmers gained tremendous ground on this year’s late planting as the seasons turned straight from winter to summer with frost and snowflakes replaced by record heat. 

Places like Omaha, NE and Sioux City, IA posted unseasonal triple digit temperatures along with Sioux Falls, SD as corn planters in these areas ran day and night.  Despite the continued lack of support from the CME Feeder Cattle contracts, cash yearling feeder prices showed some support late in the week as order buyers were still filling orders in late-week auctions as receipts are expected to turn sharply lighter. 

Mitchell, SD reported an active market on Thursday with a good test of top quality 8 weight steers averaging 840 lbs at 133.68 and over 550 head of 900-1000 pounders at 950 lbs and 123.67.  Friday’s cattle-on-feed report could be seen as neutral to slightly bearish with May 1st inventories very near expectations at 96.6 percent of a year ago and fed marketings in April at 102.2 percent.  However, April placements were larger (115.1 pct) than already lofty expectations (112.1 pct) in comparison to very light placements the same month a year ago. 

This is not surprising as April nationwide auction receipts were also 15 percent heavier than last year.  There has been much discussion about these data being gathered only from feeding operations of 1000 head or more.  Some folks believe the smaller facilities have gone by the wayside while others think they have increased in the Northern Plains with more availability to distillers grains.  More likely, confinement operations of less than 1000 head have grown or returned to production but mostly for backgrounding calves or lighter yearlings into big feeders weighing over 850 lbs. 

These cattle growers are more confident in their ability to put weight on cattle than their ability to deal with packers on such a small scale.  Feedlots continue to lose market position by cashing-in on the positive basis that cash is running to the June Board which lingers under 120.00. 

The Southern Plains reported light sales .50 to mostly 1.00 lower from 125.00-125.50 while Northern trade was not established Friday afternoon.  Meanwhile, Choice boxed beef cut-out values posted all-time record highs again this week near 209.00 while poultry values are also near record highs.  This week’s reported auction volume included 58 percent over 600 lbs and 45 percent heifers.



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