Feeder cattle review: Boxed beef showed continued strength

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Compared to last week; feeder and stocker cattle traded steady to 3.00 lower with instances as much as 6.00 lower late Tuesday and early Wednesday, but late-week sales bounced back to early-week levels with some additional recovery noted.  Reports surfaced on Tuesday that the fourth confirmed case of Bovine Spongiform Encephalopathy (BSE) was confirmed in a central California dairy cow, which sent CME cattle futures down-the-limit amid swirling hypertension within the industry.  However, mainstream media calmly reported the situation and stressed the fact that the infected cow never got near our nation’s food supply. 

Cash and futures cattle markets recovered their initial knee-jerk losses very quickly and producers were not overly affected unless they had the unfortunate timing of marketing on Tuesday afternoon.  But the aftermath of the situation actually turned-out to be encouraging, that media outlets could report the first case since early 2006 with cool heads and equitable facts.  

Wednesday afternoon in Bassett, NE a 50 head draft of thin-fleshed top quality steers weighing 570 lbs brought 201.00.  Direct slaughter cattle trade ended the week 1.00-3.00 lower from 119.00-122.00 but the BSE case could only be blamed for a small percentage of the loss, which actually had more to do with Tuesday’s Board basis promoting early trades.  Boxed beef cut-out values showed continued strength late in the week and are now within a few dollars of the whole dressed carcass, after being 18.00 back just two weeks ago. 

Feeder cattle auction numbers at some of the largest volume salebarns, including Oklahoma City and Joplin, were fairly heavy this week but nationwide receipts were still 16 percent lighter than last week as marketing seasonally slows.  So far for the year, receipts are running 4.8 percent lighter than last year and 7.8 percent lighter than the five year average. 

Many producers were busy planting corn in fair weather this week and making huge strides, whether they were making 6-row or 36-row passes.  No matter the pace, this year’s new-crop can’t help satisfy the current demand for corn on shrinking stockpiles.  Additional export demand this week pushed May CBOT contracts back over 6.50/bu with a 29 cent gain on Friday.  This week’s reported auction volume included 48 percent over 600 lbs and 43 percent heifers.



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