Compared to last week, calves and yearlings started the week mostly 5.00- 15.00 lower then turned steady to 5.00 lower from mid-week on, in many cases on light receipts. Buyers continue to be very cautious as feeder and live cattle futures still weigh like a lead balloon on the markets.
There were many cases in feeder cattle auctions this week and last where the unweaned, fleshy, full, short, off-colored, or merely plain cattle fell off the face of the market report. Feeding conditions are becoming very muddy and challenging as weather has turned nasty with heavy rains and snow throughout the Southern Plains, Midwest, and Northern Plains. Feedlot conditions have worsened with talk of declining weights, loss of performance and rising cost of gains.
Over the last couple of weeks with sharp losses in the feeder cattle markets, there have been a lot of feeder cattle bought with the idea “if these cattle don’t make any money, nothing will” it’s still very possible that feeders will go lower before they will still make money. Last week’s lack of support dashed away any hopes of redeveloping any buying support or interest in feeder cattle to start the week.
Over the last several weeks sharp losses have started the week as it seems to be less hindrance this way. Feeder cattle futures continue to lose ground to live cattle futures with dismal feedlot margins and large equity losses mounting. Fed cattle sales on Wednesday of this week traded mostly 1.00- 2.00 lower in the Southern Plains from 117.00-118.00. Live and feeder cattle futures continue to experience very light support on rallies, followed by huge downs and failing to gain any open interest on down days.
The market continues to trade lower on little news and seems to be content with it. The whole cattle complex has it seems worn out its welcome as we come to the end of 2015 with all its volatility in the futures and cash markets. As the month of December has arrived it has become “The Grinch who stole Christmas” and has not been very merry since early fall; Spring cannot come soon enough for most cattlemen.
Choice boxed-beef got off to a rocky start on Monday plunging 3.72 lower and falling below the 200.00 level. It’s starting to look like most have bought or booked all their holiday needs. Hopefully retailers will have a fire sale after the holidays as prices will be cheap enough to feature beef retail ads and stimulate demand. Choice boxed-beef closed Friday 1.62 lower at 194.14 compared to last Friday’s close at 202.50.
Cattle on Feed report was released Friday afternoon with friendly news in terms of lighter than expected November placements. With cattle futures up the limit on Friday, cattle bulls appear to have been expecting good news. Cattle on feed came in at 99.8 percent; Placements at 89.2 percent and Marketings at 103.9 percent. Auction volume included 45 percent over 600 lbs and 40 percent heifers. All of us here at the Federal/State Market News Service wish all of you a very Merry Christmas filled with fellowship and blessings.