Stocker and feeder cattle prices were $2 to $5 per hundredweight lower last week, with calves $2 to $3 per hundredweight lower. Sharply lower feeder cattle futures on the Chicago Mercantile Exchange were a significant factor in lower cash prices. Feeder cattle futures were driven lower by higher grain prices and a continuing slump in fed cattle prices.
Cash fed-cattle prices were $2 lower last week, with carcass prices $2 to $4 lower. Cattle sold for $82 to $83 live and $132 dressed. Analysts suggest the fed market could soften further the next two months, with prices possibly dipping into the upper $70s.
The early June decline in feeder cattle prices is a contra-seasonal event. But the weaker tone in the fed cattle market has put pressure back on cattle feeding margins and has resulted in more pressure on feeder cattle prices. Corn prices have also gained 50 cents per bushel since early May, driving the cost of gain higher.
Analysts don’t expect much improvement in feeder cattle prices over the next month. Cattle feeders will continue to struggle with negative margins, and corn prices are likely to creep higher through July 4. Additionally, beef demand will face stiff competition from plummeting hog and pork prices.