Compared to last week, calves and yearlings traded mostly steady to 5.00 lower, with instances 10.00 lower. Early week most sales were steady to instances higher but Wednesday’s collapse in the cattle futures pressured the market.
Market softness prevailed last week with cattle futures seeing some limited downside pressure, trying to find some stability before Wednesday’s free-fall. The return of volatility with defensive futures and with cut-out values also imploding on Wednesday with choice closing 3.19 lower put cattle market psychology in a black mood. This makes all participants in the cattle market very leery but then no one wants to be caught with empty pens or pastures if profit opportunities appear.
These are the results of an industry yearning for profits as volatility the only rule that cattle markets have abided by since last fall with many unpredictable attitudes directing market direction. Then on Thursday cattle futures saw a sharp reversal as the USDA Grain Report was bearish for grain (especially corn) with feeder cattle futures turning bright green with limit gains. This week saw many soft fall-born new crop calves making their way to the market and in many cases widening the price spread against the rugged old croppers.
In addition to market pressure on feeder calves, many lightweight offerings in the coming weeks will be overwhelmingly made up of new crop fall born calves which are not always in high demand by feeder buyers as many are unweaned and carrying plenty of flesh. Never the less, most top quality 5 weight and 6 weight steers that are longtime weaned and have good weighing conditions that are suitable for grass are still in good demand.
Meat trade following the Easter Holiday has started out on the defensive as well, after a 10.00 dollar slide backwards last week has still encountered struggling demand as sharp losses developed at mid-week.
USDA’s Grain Report on Thursday, estimated corn acres at their third highest level since 1944 at 93.6 million acres. Soybean acres came in line with expectations at 82.2 million acres. Corn acres were higher than pre-report expectations, with corn stocks for March 2016 at 7.8 billion bushels up 1 percent from last year. Soybean stocks rose 15 percent from last year at 1.53 billion bushels. Row crops will have a long growing season in front of them with time telling how it will play out.
Auction volume this week included 50 percent weighing over 600 lbs and 42 percent heifers.