Feeder cattle review: Feedlot replacements in a holding pattern

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Compared to last week, feeder cattle sold weak to 4.00 lower under pressure from sharp losses on the CME cattle futures early in the week.  The lower Board also spawned an early fed cattle trading session that was mostly 3.00 lower at 127.00, which increasingly pressured the feeder cattle market.  New crop calves were 2.00-5.00 lower (especially in the Southeast) but longtime weaned calves and old crop stockers were unevenly steady to as much as 5.00 higher. 

Grass interests have been assembling their turnout cattle throughout the winter and even though it is only early March, they want stockers that can immediately take advantage of early forage and don’t need extensive pre-conditioning.  The nation’s fourth mildest winter on record has most feeder cattle coming through the winter in a fleshier condition than normal, which is not what most backgrounders are looking for as they would rather purchase winter-weary turnouts with compensatory gain. 

At current price levels, cattle growers need to recoup a portion of the expense through cheap cost-of-gains early in the grazing season.  Many of what-few cattle that were wintered on leased wheat pasture have to be off by the 15th of March which has increased auction receipts in these areas.  Graze out prospects are not great as many of these pastures need another drink to support cattle and wheat farmers would rather try their luck at a crop or put up round bales of wheat hay which remain in high demand.

High winds plagued much of cattle country this past week, sapping moisture and causing Southern Plains’ producers to pray they are not in for another year like 2011. 

High beef prices are meeting resistance in the grocery aisle and grilling weather has not yet arrived to fully test the demand potential at the new levels.

For now, the feedlot replacement market seems to have hit a wall and could be in a holding pattern until supplies become much tighter or fat cattle bust completely through the 130.00 barrier.  Feeder cattle were fully 4.00-8.00 lower on a good test at Torrington, WY on Wednesday, but replacement quality breeding heifers remained very active.  Nearly 750 head of 600-750 lb open heifers from Torrington sold for replacements with an average weight of 658 lbs and an average price of 162.33 or nearly 1070.00 per head.  This week’s reported auction volume had 57 percent over 600 lbs and 45 percent heifers.



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