Lower trending commodities and nervous world financial markets forced an end to the standoff between packers and feedyards last week. The bulk of the week’s trade moved on Wednesday at $121 per hundredweight in the south, $2 below the previous week, and $194 to $195 per hundredweight dressed in the north, $1 below the previous week. Packers dropped bids $1 the next day, but came back on Friday offering $121 and bought additional cattle to round out the week. Slaughter rates remain strong, though the numbers are below last year.
Boxed beef cutout values finished the week stronger than the previous week. Choice boxed beef traded Friday at $194.63, up $2.12 per hundredweight from the previous Friday. The Select price on Friday was $185.46, a decline of $1.10 per hundredweight from the previous week. The Choice-Select spread widened to $9.17, compared to $5.95 per hundredweight the previous week. Packers posted profits thought to be near $10 per head on cattle processed. Losses for cattle feeders continue.
Calves and feeder cattle sold at auction steady to $3 per hundredweight higher last week, with instances of calves and yearling $5 to $6 higher. Direct feeder cattle trade in Texas and Kansas was $2 to $5 higher. Demand remains strong for feeders, and best on yearlings, although many cattlemen were disappointed in the market’s response to the bullish cattle on feed report issued the previous Friday.
USDA Market News Reporter Greg Harrison said to expect lower numbers and replacements offered through the summer months. “The USDA Livestock & Grain Market News office in Dodge City, Kan., noted that temperatures reached 100 degrees F. this week with very windy and dry conditions. If the dry conditions continue over the next couple of week they will see cattle moving early off grass to the auctions. The western two-thirds of Texas remains dry but the region is not in nearly as bad of shape as they were last year, with Oklahoma now out of drought conditions with improvement continuing.”
Last week’s auction receipts totaled 187,100, compared to 164,700 the previous week and 149,800 last year. Direct sales of stocker and feeder cattle totaled 57,200 with video/Internet sales at 41,200. The weekly total was 285,500, compared to 201,600 last year.
Corn planting is nearing completion nationwide, with 96 percent of the crop reported as in the ground. That compares with 79 percent last year and a 5-year average of 81 percent. Early planting and good growing conditions pressured corn prices last week, as did world financial markets. Crude oil dipped below $90 per barrel for the first time since November, and the European Union’s debt crisis continued, keeping Wall Street traders nervous.
Slaughter cows and bulls sold mostly steady, with instances of $2 higher in the southeast. USDA’s cutter cow carcass cut-out value Friday was $179.28, unchanged from the previous week.