Compared to last week, calves and yearlings started the week mostly 5.00- 12.00 lower then turned 10.00-20.00 lower from mid-week on, with instances 25.00-30.00 lower from light calves to yearlings. Feeder cattle buyers substantially lowered their bids this week as they try to get cattle bought with break evens that look attainable as another week of cattle futures plunged to new contracts lows. Feeder cattle buyers also remain very cautious and very selective on quality and condition but quick to discount anything that is unweaned and carrying too much flesh. The fed and feeder cattle market still is in search for a bottom as we head into the final weeks of 2015. Aggressive selling in the cattle futures this week saw sharp triple-digit losses for each of the first three days of the week with little or no long term support in the market.
Feeder cattle are caught in a bottleneck of lower fed cattle prices, sharply lower cattle futures and record supply of competing meats as the entire livestock complex continues to struggle with these issues. The packer has plenty of front end supplies and doesn’t have to chase the market or get into high gear to buy fed cattle. Feeder cattle prices both cash and futures have been too high when compared to the fed cattle market. Until the fed cattle market finds a bottom and live cattle futures find support hoping to see higher fed cattle market down the road feeder cattle prices will continue to come under pressure until they align with profitable returns on fed cattle. Live fed cattle prices this week sold mostly 5.00-6.00 lower from 117.00-119.00.
This week USDA export data compiled by the U.S. Meat Export Federation reported October beef exports are down 14 percent from year ago levels in volume at near 95,000 mt while the export value fell 26 percent to $508 million compared to the record high value posted in October 2014 at $687 million. Pork exports in October were down 3 percent from year-over-year in volume at 177,190 mt and fell 21 percent in value to $447.8 million reflecting lower global pork prices. Last week’s boxed-beef trade found renewed interest after Thanksgiving pretty lackluster with sharp losses last Friday. Lower beef prices at this time are not stimulating buying interest which is hard to accept if you are in the beef business. Seasonally we usually have an upturn in demand for beef, so far the upturn has been pretty meager.
Beef products are having a hard time getting a fire built under beef demand. The consumer has a large offering of meat to choose from; the amount of beef, pork, and poultry are enormous as pork prices have dropped considerably in supermarkets, but beef products have not shown that much of a decline in comparison. Choice boxed-beef prices closed .58 lower on Friday at 202.50. USDA released its WASDE Grain report on Wednesday making no changes to the US soybean and wheat crop balance sheets. Soybeans have ending stocks remaining at 465 mb and wheat ending stocks left unchanged at 911 mb. USDA bumped up its forecast for corn use in ethanol production by 25 mb, while cutting exports by 50 mb resulting in a 25 mb increase to 2015-16 ending stocks at 1.785 bb. Auction volume included 47 percent weighing over 600 lbs and 37 percent heifers.