Compared to last week, yearling feeder cattle sold mostly 5.00-8.00 lower with instances 10.00 lower with the most declines on those weighing over 800 lbs. Steer and heifer calves traded unevenly steady to mostly 5.00 lower, with unweaned and fleshy calves trading 10.00-15.00 lower.
In the Southeast calves sold mostly 2.00-5.00 lower with instances 10.00 lower. Prices have leveled off the last couple of weeks with the fed cattle market struggling to hold its ground and most of the more-aggressive stocker orders having been filled.
Farmer-feeders have now fully moved into planting season mode and most will have little interest in the cattle market until they put their planters away. Good margins do not exist for either the packer or the cattle feeder at this time. Last Friday, live cattle and feeder cattle futures fell out of bed with aggressive selling pressure with live cattle futures down the limit, and feeder cattle contracts trading near limit losses.
The momentum and support seen early last week saw traders flee the market last Friday as all the gains for the week were wiped out. As prices turned lower, buyers were not to be found as the market losses kept mounting and the tone of the market was set in part for this week, as futures on Monday were hit with triple digit losses. Volatility and unpredictable attitudes continued, as on Thursday cattle futures were mostly limit higher and closed with sharp gains on Friday.
Over the last three weeks live fed prices have lost 8.00/cwt seeing significant price erosion going into May. Packers have kept the lid on cattle slaughter which has been particularly light over the last several months as they have struggled with poor margins. Packers have drastically cut kills, bought cattle for 3-4 weeks out, now have the leverage over the cattle feeder and will want to guard it with determination.
Feedlots have shown that with higher breakevens for feeder cattle placed on feed they are willing to keep cattle on feed longer stretching out marketing windows as steer carcass weights are at 871 lbs for the week ending April 11th, 21 lbs heavier than last year at this time.
Demand for meat is starting to pick up with pork and poultry being priced substantially below beef are starting to take center stage. The latest USDA cold storage report suggests that more product is ending up in the freezer than being absorbed by the consumer. Supplies of beef, pork and poultry were significantly higher than a year ago. This is a result of higher production especially of pork and chicken, lower exports and higher imports of beef.
Total beef in cold storage was 479.8 million pounds ending March 31 compared to year ago totals of 405.8 million lbs. Pork supplies in cold storage ending March 31 were 668.6 million lbs compared to year ago totals of 575.5 million lbs. Chicken had supplies of 751.9 million lbs ending March 31, compared to year ago levels of 591.6 million lbs.
Friday’s afternoon Cattle on Feed Report had April 1 inventory at 100 percent; placements at 100 percent and marketing’s at 98 percent. Inventory was slightly higher than expected, with placements larger than expected and marketings close to expectations. Auction volume included 54 percent over 600 lbs and 41 percent heifers.