Compared to last week, the downtrend continues in the feeder cattle markets as feeder cattle and calves traded 5.00-15.00 lower this week.  

CME cattle futures over the last couple of weeks have latched onto a lead balloon and have weighed heavily on the feeder cattle markets. The wide spread massive long liquidation selling has just swamped cattle futures.  Overall demand remains good for lightweight stockers under 550 lbs to make yearlings of, but the overall availability of these lightweight feeders normally gets tighter as we roll into spring; with thoughts that these lightweight calves can achieve cheap gains when pasture develops.

Heavier weight feeders, of which the supply is more readily available, felt the full pressure of price declines this week. Many major salebarns in the Northern and Southern Plains are seeing some of their heaviest receipts of the year with the unfortunate timing of the volatile feeder cattle and futures market. Cattle buyers have paid high premiums for feeder cattle and now break evens are much higher than the futures with the June Live Cattle board closing near 143.00 as contacts continued their free-fall on Friday.  Cattle contracts closed limit down on Friday finding only bearish friends.  Keep in mind that the record highs in the cattle future prices last year were supported from fund buying and now the funds are pulling back looking like they have had their belly full of the cattle markets.

At some point this break will be deemed overdone, but when is the question. However, there were some impressive sales of hardened winter proof feeders around the auction circuit, in Bassett, NE on Wednesday feeder steers under 650 lbs sold with very good demand for summer grazing. Near 550 head of steers averaging 577 lbs sold with an weighted average prices of 299.22 and over 200 head of thin steers averaging 624 lbs sold with a weighted average prices of 291.35. Summer grazing will likely take these kinds of cattle to unprecedentedly large weights on pasture to avoid any kind high feed costs. 

Beef demand has worries over rising meat supplies of pork and chicken and at this time is taking presence over tight cattle supplies.  The feeder and fed cattle markets along with the futures seem to be tiring of news about tight supplies. Friday’s afternoon Cattle on Feed Report had January 1 inventory at 101 percent; placements at 92 percent; marketing’s came in at 95 percent. Inventory was slightly lighter than expected, with marketing’s slightly smaller than expected.  This week’s auction volume consisted of 58 percent over 600 lbs and 38 percent heifers.