Compared to last week, feeder cattle and calves followed through on support that was shown last week selling mostly steady to 5.00 higher, with some instances of 10.00 higher on calves. Recently, the feeder cattle market has been a rapidly descending affair and finding a bottom is difficult. The last couple of weeks it seems the market may have found some legs; whether this market has found long legs or short legs is difficult to say. Just when you think this market has found some legs, it can’t stand prosperity and has a sell- off. Despite the frozen tundra that prevails throughout much of the major cattle producing areas, stocker demand for the most part was very good this week. Backgrounders are expecting grass cattle supplies to be tight as we go into spring; and everybody knows a few guys that will buy cattle for grass, no matter what they cost. In many areas of the country, especially in the Northern Plains and the Midwest are securing top quality females to grow through the spring and then turn in with the bulls.
At the Hub City Livestock Auction in Aberdeen, S.D. on Wednesday sold over 250 head of top quality replacement heifers averaging 771 lbs for a weighted average price of 235.85 and over 120 head of "mothers to be" averaging 826 lbs for a weighted average price of 238.77. In Burwell, NE last Friday February 13th sold over 165 head of replacement quality heifers averaging 613 lbs for a weighted average price of 264.64 and near 350 head of heifers averaging 690 lbs for a weighted average price of 231.69. There are still multiple layers of overhead resistance that will continue to challenge the feeder cattle markets, but Boxed-beef demand is attempting to find a bottom and starting to find some footing after seasonal slowdown.
The labor dispute on the West Coast is not helping exports and a settlement could go a long way in improving beef exports as it threatens much of the US economy. Relief from winter storms pounding the Northeastern seaboard and major population centers has slowed beef consumption and movement. A shift in the investment scene that causes fund managers to read fundamental cattle production data more literally; but the case right now is that regardless of market fundamentals and structure, fund managers just don’t want to be long at this time in the cattle complex. Any of these occurrences or a slight combination at any level could be enough to jumpstart feeder cattle prices back on track. We need to keep commodity prices in perspective, where prices have been and where prices could go. The cattle and hog spread is another thing to keep in mind. Hog supplies remain much larger than anticipated and with decreased exports have created a glut of pork for the domestic market to absorb. Even though beef is the preferred meat of consumers; a dressed hog is quite a bargain when compared to a dressed steer.
For the week, feedlots in the Southern Plains traded cattle 2.00 lower at mostly 160.00, while dressed sales in Nebraska were steady to 3.00 lower at 253.00-258.00. Friday afternoon's Cattle on Feed Report had February 1 inventory at 100 percent; placements at 89 percent; marketings came in at 91 percent. Inventory and placements were slightly higher than expected, with marketing’s slightly smaller than expected. Auction volume included 68 percent over 600 lbs and 39 percent heifers.