Another week, another lack of negotiated cash fed cattle trade.
By close of trade Feb. 15, not even 3,500 head had been confirmed sold for the week. The week before saw cash cattle trade pushed off until very late Friday afternoon. In recent past weeks, cash cattle volumes had been reliably up over 100,000 head. For the week of Feb. 5-9 however, only 76,500 head traded, leaving analysts expecting last week’s trade to be larger to cover their needs.
The few cattle that traded throughout the week went for $126-129.50 live and $202 dressed, though volumes were too low to set trends. By Thursday morning, Andrew Gottschalk of Hedgers Edge predicted cash trade would occur at $128 live “unless the futures give up recent gains.”
Futures did not in fact give up gains. Instead, they doubled down, making their biggest one-day gains of the week on Thursday. The February contract settled at $129.27, up a net $2.75 compared to the Feb. 9 settle. The April contract settled at $127.25, a net gain of $3.63.
“This will be a very interesting area for April and June live cattle as these highs from $126-127 in April and $117.50-118.50 will be very formidable overhead resistance and will be key to extending this rally any further,” commented Troy Vetterkind of Vetterkind Cattle Brokerage on Thursday morning.
“If we get a stronger than anticipated cash fat cattle trade this week the market can certainly pop higher but I question the longevity of it.”
“The product undertone remains weak, amidst a seasonal decline in beef demand,” commented Andrew Gottschalk of Hedgers Edge. Over the course of the week however, both Choice and Select gained about $2.50 with Choice closing on Feb. 15 at $209.04 and Select at $205.14. The near-term Choice resistance level has been quoted at $210.
“Retailers reduced their average price for Choice beef during January to $5.76, down from $5.81 in December, while remaining above the January 2017 average of $5.66,” Gottschalk continued. “Overall, demand factors remain positive for beef and meat demand.”
Feeder cattle
Feeder auction prices across the country were decidedly mixed, but demand was generally said to be good.
“Cheap feed grain prices, coupled with profitable fed cattle closeouts, should minimize the seasonal weakness in feeders into the early spring,” noted Gottschalk.
Some areas, such as the Corn Belt, had weather-related issues. Others credited good weather for grazing and futures movements for the improved prices.
Medium and large 1-class (#1) steers weighing between 700-800 lbs. ranged from the $130s to $170s, though prices in the upper-$140s to lower-$160s were more the norm.
California: The Cattlemen’s Livestock Market sold 737 head last week. All classes of feeders were called steady. There were no #1, 7-weight steers reported sold, but #1, 6-weight steers sold at $145-162.
Colorado: Sale volumes were slightly up last week at the Winter Livestock auction of La Junta. Prices on feeder cattle were mixed. Steers under 700 lbs. were down $2 except light 5-weights which were up $3. Heavier steers and heifers were steady to up $1 with instances of up $3 on thin-fleshed steers. Two groups of #1, 7-weight steers sold for $154.70 for the 710-lb. steers and $147.50 for the full-fleshed 745-lb. group.
Kansas: The Pratt Livestock Feeder Cattle Auction sold 3,400 head last week at firm to $3 higher prices on feeders. Instances of $6-8 higher prices on steers were noted. Prices on benchmark steers ranged from $150-159.50, and a group of value-added yearlings weighing 755 lbs. averaged $163.
Missouri: At the Joplin Regional Stockyards not even 3,000 head sold, likely due to the ice storm which forced things to start late. Light feeders sold up $1-5. Number 1, 7-weight steers sold between $143-155.
Montana: There was no trend available at the Public Auction Yards due to the sales volume being a sixth of what it had been the week before. Light offerings of pieced-together loads were said to have met with moderate demand. Larger groups of backgrounded cattle saw good demand. Four head of #1, 761-lb. yearlings averaged $148, and eight head of #1, 708-lb. yearlings averaged $151.50.
Nebraska: Sales volumes were up at the Huss Platte Valley Auction. Midweight steers sold up $6-8, with steers over 800 lbs. down $2-6. Most heifers sold down $3-4, except for 7-weights which were steady. Demand was called moderate to good. Yearling benchmark steers ranged from $151.50-170. A group of 11 benchmark calves averaged $140.
New Mexico: The Clovis Livestock Auction sold about a third fewer cattle last week than the week before. Light steers under 600 lbs. sold up $9-12 while heavier animals were up $1-4. Heifers under 600 lbs. sold for $3-7 higher, with instances of up $10 on 3-weights, and steady on heavier heifers. Two groups of benchmark steers ranged from $135-152.
Oklahoma: Almost 12,500 head of feeder cattle traded last week at the OKC West-El Reno sale. Midweight steers sold steady to up $3, while those over 850 lbs. were down $1-2. Heifers were up $1-3. Calves sold up $3-8 with preference for heifers. Demand was called good on all classes of feeders, but especially good on weaned, light-weight calves. Many small groups and two large (550 head+) groups of benchmark cattle sold ranging from $143-157. Calves were actually closer to the higher end of the range and the bottom was set by heavy, fleshy yearlings.
South Dakota: The Hub City Livestock Auction sold about 5,900 head last week, down from the 7,000 head the week before. Feeder steers were steady to $4 higher, while feeder heifers were steady with instances of down $2. The futures were credited with allowing prices to improve. Benchmark steers sold between $145.50-166.25.
Texas: Not even 450 head sold at the Amarillo Livestock Auction last week, but feeders were called steady to firm on the limited comparable sales. Demand was called good. Four #1, 795-lb. calves sold, averaging $135.
Wyoming: The Torrington Livestock Commission sold 1,000 fewer cattle last week than it did the week before. Prices were mostly steady to lower, with steer calves steady, yearling steers down $3. Heifer calves under 500 lbs. were steady to down $4, heavier heifer calves were up $2-4, and yearling heifers were just steady. The few benchmark cattle that sold ranged from $150-157.50.
Near-term feeder cattle futures kept pace with the gains made in the live cattle futures. Over the course of the week, the contracts gained over $3. The March contract settled Feb. 15 at $149.82 and the April contract settled at $152.30.
“The combination of supportive moves in feeder cattle futures as well as the ability to bring moderate-to-strong support to all live cattle trade has sparked some increased underlying support through the entire complex,” said Rick Kment, DTN analyst, speaking of feeder cattle.
“With April contracts moving through short-term resistance levels set in early February, contracts are trading at the highest level since November. This is likely to bring about additional underlying support over the near future, with potential buying moving back into the complex.” — Kerry Halladay, WLJ editor
