Feeder cattle review: Feeders on a 10-week rally

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Compared to last week, yearling feeder cattle sold firm to $4 higher as prices posted gains for the tenth straight week.  Calf markets have now fully embraced the trickle down demand with lightweight new-crop steers and heifers trading $2-$6 higher.  Retreating corn prices and the expectation of a bumper crop continues to drive feeder cattle prices with very good demand noted for all classes.

The eastern two-thirds of the United States has fallen into a wet cycle with pop-up showers and thunderstorms prevailing across much of our country’s most productive ground.  Feeder cattle price levels are mostly $20 higher than the same time a year ago and the CME Feeder Cattle Index value (based on a 750 lb steer) is near $149.50 and at its highest point since January. 

Some of the most impressive feeder cattle marketing of late has been achieved through video auctions as the absence of any monstrous order buying firm has resulted in high volume cattle feeders (including corporates) aggressively bidding against each other, plus additional competition from independent farmer feeders. 

Fed cattle sellers have long dreamed of even a glimpse of similar buyer demand.  On Monday, the Cattle Country Video which is a joint effort of regional salebarns stretching from Creston, IA to Torrington, WY sold 180 head of all-natural steers from Tryon, NE to weigh 900 lbs in September for $154.  Superior Video’s Video Royale XXI from Winnemucca, NV featured some of the top strings of cattle from the Western Region with top billing going to the Sierra Valley Ranch outside of Reno, NV.  They sold two loads of fancy non-hormone 770 lb current delivery steers for $159, with another 540 head weighing 865 lbs at $155.25.  Onlookers are starting to shake their head at the short-memory cattle feeders but profit opportunities are easier to chase down on cheaper inputs than they are on hopes of a higher fed cattle market. 

In the cattle business, pounds always add up faster than dollars and affordable cost-of-gains on high performance cattle can cover-up a multitude of sins.  Backgrounders and cattle growers are already re-loading their pastures and lots with early arrivals of this year’s calf crop. 

Current yearling prices and moisture conditions should allow cow/calf producers to keep-back additional heifers which will exacerbate tight supplies in the short run.  Most herds were well culled over the last few years and slaughter cow receipts are lightening across the country while price levels rise to take-out the older-bred-cow buyers.  This week’s reported auction volume included 56 percent over 600 lbs and only 38 percent heifers.



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