No rain, no rally; feeder cattle sharply lower

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Feeder cattle sold $3 to $5 lower last week on the heels of a similar decline the previous week. Prices have now declined two straight weeks under pressure from higher corn prices, lower futures prices and dwindling hope the drought will ease its grip on the Great Plains.

Stocker cattle and calves were called unevenly steady with the heavier calves finding instances of prices as much as $5 lower. Lightweight calves under 450 pounds saw some bids as much as $10 lower.

“Both feeder and finished cattle cash markets seemed to be finding fairly solid footing by week’s end after a whirlwind opening to 2013, with buyers frantic to fill needs the first full week of business and then pulling-in the reins,” says USDA Market News Reporter Corbitt Wall. 

“However, cattle feeders and backgrounders are keeping a close eye on the rapid drop in offerings with nationwide auction receipts 35 percent lighter than the opening week stampede just two weeks ago.  Due to feed and water shortages, producers have been selling cattle ahead of schedule for well over a year and many have now gotten down to those that are just about to be born,” Wall says.

“The loss of market position on the CME Live Cattle contracts and seemingly unreachable breakevens have taken many feeder cattle buyers out of the market but the expected destiny with unprecedentedly tight supplies has many doing what they do best - betting on the come.”

Last week’s auction receipts totaled 226,000, compared to 293,100, the previous week and 258,400 last year. Direct sales of stocker and feeder cattle totaled 44,700 with video/Internet sales at 6,900. The weekly total was 255,100, compared to 323,200 last year.

Cash fed cattle prices traded in a wide range last week. The bulk of the trade occurred on Wednesday at mostly $122 per hundredweight, $1 to $3 lower than the week before. By Thursday there was minimal trade steady to $1.50 higher in the Northern feedlot areas from $122 to $124 per hundredweight. Dressed sales occurred at $198, with a few at $199 per hundredweight.

Boxed beef prices declined for the week. Choice boxed beef cut-out values Friday were $187.44 per hundredweight, down $2.40 from last Friday. Select boxed beef traded at $181.86, down $0.75 from the previous week. The Choice/Select spread was $5.57 per hundredweight.

Slaughter cows and bulls sold unevenly steady to $3 higher. USDA’s Cutter cow carcass cut-out value Friday morning was $163.32 per hundredweight, down $1.10 from the previous Friday.

Friday afternoon’s cattle on feed report was called bullish with December marketings larger than expected, and placements lower than expected.

Cattle on feed January 1 was pegged at 11.19 million head, 5.6 percent lower than last year. Placements for December totaled 1.664 million head, 99.5 percent of a year ago. Marketings in December totaled 1.745 million head, 1.7 percent less than last year.



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