Compared to last week, yearling feeder cattle sold 5.00-15.00 lower, while calf prices traded 10.00-20.00 lower, with instances 25.00 lower. The feeder cattle market remains in a very bearish camp with all systems on the go to the downside. Several auctions saw the arrival of spring born calves, but have yet to see them arrive in droves. The onset of the wide spread between daytime high temperatures and overnight lows is typical of autumn’s arrival. The increased supply of calves getting ready to hit the market at lower prices will cause buyers to be extremely more selective in their purchases.
With the market in a downtrend discounts will more than likely become even more severe on unweaned and fleshy calves. Last Friday saw sharp triple-digit losses in both Live and Feeder cattle futures continued into this week with more heavy losses with the lack of any bullish news to help the market. This has market psychology extremely on the defensive side.
With another week of falling prices in the fed cattle market doesn’t seem to anticipate a price rally anytime soon continues to weigh heavy on the feeder cattle market giving feeders little leverage. At this time it’s hard to say when and where fed cattle prices will bottom. Live fed cattle prices ranged mostly from 135.00-136.00, 4.00-5.00 lower than last week and dressed sales ranged from 210.00-214.00 in the North mostly 7.00-8.00 lower than last week. The challenges of bearish fundamentals facing the cattle complex are not letting up. Heavy carcasses and inflated market ready supplies throughout the Corn Belt have allowed the packers to propel the fed cattle market lower.
The protein machine is still putting out a good amount of pork and poultry with concern about beef demand; as the meat sector seems to have plenty of pounds to satisfy the market both here and abroad. Boxed-beef values continue to come under pressure hitting new lows for the year as Choice Boxed- beef on Friday closed 4.20 lower at 226.30 compared to last Friday’s close at 236.09.
On Thursday the Fed decided to hold off on interest rate hikes until further notice, this seemed to upset already unsettled markets. The Stock Market on Friday closed with sharp losses blaming uncertainty by the Fed’s decision to wait. Cattle on Feed Report was released on Friday and appears to be neutral to somewhat bullish. Cattle on feed came in at 103 percent; placements came in at 95 percent, 5 percent less than last year and smaller than trade was expecting; Marketings came in at 94 percent the smallest since the series began in 1996. Auction volume included 53 percent over 600 lbs and 39 percent heifers.