Compared to last week, calves and yearlings sold steady to weak during the Labor Day holiday-shortened trading session. Early-week sales were slightly lower on limited activity, but modest support popped-up once normal trading resumed later in the week as the industry expects continued cheaper feedcosts following the release of Friday’s USDA Crop Production Report. Total corn estimates were raised from 12.761 billion bushels on last month’s report to 12.955 with an average yield of 161.9 bu/acre, which would be the highest on record. Soybean production estimates were also raised to 3.245 billion bushels and an average yield per acre of 42.3 bushels, which would be the third largest on record.

Temperatures were cooler than normal across most major production areas this summer, but moisture levels were mostly adequate which resulted in bumper crops - since dry conditions are the main culprit for poor yields. Cash corn prices are expected to remain just over 3.00/bu across the Midwest which can result in some fairly reasonable ration costs, especially when mixed with inexpensive high moisture distiller’s by-products  and ground with a percentage of this year’s hay surplus. These relatively cheap gains along with continued outstanding feedlot performance have actually allowed some cattle feeders to reach breakevens on a few pens of 85.00 fed cattle over the last couple weeks. However, feeder buyers are collectively showing reserve on the purchase of feedlot replacements as huge amounts of equity have been lost on the last several cycles of cattle feeding ventures. Plus, cattle feeders know that the feeder market is about to make the shift from a seller’s to a buyer’s market.

The entire industry is readying for the “fall run” as droves of western grass yearlings (some contracted – some not) and gaggles of spring-born calves (some weaned – some not) will be moving to new homes over the next couple months. Salebarns, feedlots, pre-condition crews, truck drivers, and day-working cowboys are all
servicing their equipment in preparation for the stampede and these folks will soon swear that their nights are getting shorter (when in-fact the days are). Receipts will soon swell and buyers will get progressively more selective as price ranges grow on similar types of cattle with slightly different particulars. Most major Monday markets were closed this past week, but a few Midwestern salebarns held specials on Labor Day; including Russell, Iowa which sold over 5000 head. Top quality feeder steers were in high demand in southern Iowa with over 850 head of 6 weights averaging 107.66, nearly 600 head of 7 weights averaging 103.91, and over 300 head of 800-900 lb steers with a mean of 100.16. This week’s reported auction volume included 53 percent over 600 lbs and 41 percent heifers.