— Other indicators bearish.
— Light volumes, moisture boost calf prices.
Fed cattle trade activity was following the pattern set the previous
three weeks with northern trade happening Thursday and southern cattle
not being marketed until Friday. Through midday Thursday Nebraska cattle
feeders had sold 15-20,000 head at mostly $140-141 dressed. No trade
activity was reported in either Kansas or Texas, as packer bids were
still hovering around $86, while asking prices from prospective sellers
While early trade in northern feeding areas was $1-2 higher than two
weeks ago, packer bids were starting to be pulled back with most getting
back down into the $138-139 range, steady with the previous week.
Analysts thought steady money might be possible, but it wouldn’t be on a
Nearby futures contracts appeared to be the saving grace to cash feds
last week, as February continued to hover just above the $90 mark.
Traders speculated that cooler, wet weather was slowing down cattle
marketing rates along with the uncertainty that is still circulating
about the Canadian border situation.
However, other trade analysts said expanded boxed beef movement last
week wasn’t enough to offset a beef production surplus the previous
couple weeks and that widening packer losses were keeping demand for
slaughter-ready cattle depressed and limiting much chance for a market
In fact, the ongoing market situation was enough to force Tyson Foods
Inc. to announce last week production slowdowns at its Cactus, TX,
cattle processing facility. The company also announced that chain speeds
have been slowed at its Grand Island, NE, plant for the past several
Tyson earlier this year announced several temporary facility shutdowns
in the Northwest and Far West regions of the country.
Swift & Company and National Beef have also slowed production at several
Slaughter volume last Monday through Thursday was 465,000 head, 5,000
below the same period the week previous. For the week ending Jan. 30,
total cattle slaughter was 589,000 head, 2,000 head more than the week
previous but 10,000 head below the same week last year.
Several analysts reiterated that weekly cattle slaughter probably only
needs to total 560-570,000 head to keep up with current beef demand
levels. Even though the last few weeks have shown slaughter levels below
a year ago, they are ahead of what consumption is right now, analysts
On top of that, packer margins ranged between a negative $45-50 per head
during the middle part of the week, and that was keeping most
prospective buyers from bidding even close to steady money, compared to
two weeks ago. For the week ending Jan. 30, the average cattle price was
$88.21 live, $139.78 dressed.
Boxed beef prices continued their slide through most of last week,
leading to the widening losses reported by processors. As of Thursday
midmorning, the Choice boxed beef cutout was at $142.31, down from
$146.10 the previous Thursday. Select was at $137.70, compared to
$140.58 the previous week.
Some concerns were being raised that cattle feeders might start losing
the currentness that they have seen the past few months. The primary
indication of that, according to analysts was the narrowing of the
Choice/Select spread to under $5 last Thursday. The previous Thursday,
that figure was still around $6.50.
While weather deterred a lot of producers from shipping calves to market
in the southern third and central Plains of the country last week,
prices were called mostly steady to stronger.
The buyers in attendance at most central and southern auctions were
actively snatching up lighter feeder and stocker steers for $1-3 more
than two weeks ago. Heifers were being bought at mostly steady money,
with isolated reports of $1-2 less being anted up.
Recent moisture has once again spurred stocker operator demand because
of forecasts for extended good grazing opportunities, southern auction
barn managers reported.
Stocker operators weren’t scared off by the weather. Several of those
operations, including some closed-in facilities, are able to get cattle
acclimated to both the new operation and some extra supplemental feed,
specifically corn and other cheap feed grains, that they will be on over
the next four to six weeks.
In northern areas of the country, price gains were up as high as $5 as
weather was reportedly very good for both placing cattle into feedlots
and pasture conditions. In addition, volumes in the northern tier were
very small, being 50-60 percent below the previous few weeks.
Heavier weight, more placement ready cattle were seeing softer prices
paid last week, despite continuing cheap corn prices. A large area of
the country showed $1-3 less being anted up by buyers for yearlings.
Last Thursday morning, March corn futures were at $1.94 and several
reports indicated cash corn at $1.65-1.80 per bushel, or $2.95-3.25 per
However, the lack of any significant upturn in the cash fed market, and
continued $25-40 per head losses by a majority of cattle feeders, kept
prices for heavier weight calves and yearlings depressed. Wet weather,
while being good for grass prospects, also hurt cattle feeder demand as
southern feedlots were very muddy from recent moisture, making it
difficult for trucks to get around and for labor to meet the demands of
The CME feeder cattle index, for 700-850 pound steers, was hovering
around $103 last Thursday, compared to $104.46 the previous Thursday.