Feeder cattle marketing was brisk for the first full week of 2015 which in many cases the first two weeks of the year post some of the heaviest receipts of the year. Compared to the last full non-holiday week of sales which was the week ending December 19th, feeder cattle and calves traded mostly 10.00-15.00 higher with spots 20.00 higher.
The market has rebounded nicely; gaining back most of its losses now that the holidays are in our review mirror as Feeder Cattle contracts have surged most of the last three weeks with the idea that the December lows hopefully represented a market bottom. Extremely cold weather from and Artic blast had sub-zero temperatures throughout the Northern Plains and Midwest this week as this cold front covered the majority of the country. However feeder cattle prices broke out of that deep freeze to find buyers actively bidding to fill orders. At the Fort Pierre, SD Livestock Auction on January 2nd, over 250 head of steers averaging 822 lbs trading at an average price of 234.55. In Green City, MO at the Green City Livestock Auction on Wednesday of this week sold 150 head of 7 weight steers averaging 717 lbs traded at 261.66.
Also on Wednesday at Bassett, NE Livestock Auction on Wednesday sold over 300 head of replacement quality heifers averaging 667 lbs sold with a weighted average price of 281.37, with a top of 301.00. Then on Thursday in Ogallala, NE Livestock Auction sold over 250 head of fancy steers averaging 608 lbs selling with a weighted average price of 299.48. On Tuesday of this week short bought packers pulled the trigger early to regain a foothold of the fed cattle inventory as a full out scramble ensued to procure needs on cash cattle trade which was very bullish as live sales were mostly 4.00 higher in Kansas at 170.00. Dressed sales in Nebraska ranged from 270.00-275.00, with bulk of the trade at 270.00-272.00. Processors came back from the holidays needing product and tight feedlot numbers still remain a major driver.
Boxed beef prices are advancing, but not as fast to keep up with the fed cattle market, as packer’s margins are again under the gun. Beef production continues to fall below year ago levels, which will continue through January. Feeder and Live Cattle futures are all but ignoring the high feedlot trade along with the higher feeder cattle prices paid this week. Feeder and Live Cattle futures are falling hard with sharp losses in the opposite direction of the cash trade going against bullish fundamentals as feeder cattle prices are well ahead of nearby feeder cattle futures. Caution seems to be in order with uncertainty and volatility entering back into the cattle futures with funds rebalancing. The feeder cattle market of 2014 discovered just how high it could reach with the record corn harvest.
The elevation of spring stocker calf and replacement stock price levels is difficult to estimate with current high prices, but could still be north of current levels as demand remains very good for available feeder cattle. This week’s auction volume included 59 percent over 600 lbs and 38 percent heifers.