For a change of pace last week, cash fed cattle trade got started early in the week and at noticeably higher prices.
Negotiated trade got underway on Tuesday and by market close on Thursday, over 15,000 head had been confirmed sold. Live cattle sold at $110-112 and dressed cattle went for $175, both up from the prior week’s prices.
These prices confirmed the Thursday-morning projection of Troy Vetterkind of Vetterkind Cattle Brokerage:
“Cattle futures have a $111-112 live/$175-176 dressed cash market priced in for this week, which I think feedlots will get, and are getting a little overbought and probably due for a short-term correction.”
A correction did seem to happen in the near-term live cattle futures, with Thursday’s trade seeing low triple-digit losses. Stronger triple-digit gains during Tuesday’s trade more than kept the week in the black, however.
Over the course of the week, there was a net gain of $1.33 in the October contract with a Thursday settle of $112.35. The December contract saw more modest net gains of just 39 cents to settle at $117.27 on Thursday afternoon.
“Fund buying has been strong and I think will remain strong in this market, but to see a couple dollar correction after the recent market action shouldn’t be unexpected,” continued Vetterkind.
Cutouts were also up last week. By close of trade Thursday, the Choice cutout was $197.44, a net gain of 22 cents compared to the prior Friday’s close. The Select cutout made even larger gains. With a Thursday close of $189.45, it had gained a net $2.22 over the course of the week.
These gains came despite recent increases in slaughter rates.
“The release of the actual slaughter data for week ended Sept. 30 brought news of a new high for fed slaughter in 2017,” reported Cassie Fish of the Beef Report. “Fed steer and heifer kill for that week totaled 523,000, 2,000 head above the earlier high for the year made in September also and pushing packer plant capacity utilization to new highs.”
“The multiple +500,000-head fed kills have apparently managed to keep cattle marketings more current than many suspect, as steer carcass weights for that same week dropped 3 pounds from the prior week to 894 pounds, 15 pounds under a year ago. Both fundamental facts are constructive and give additional credence that the 2017 seasonal lows were made in [the third quarter].”
Last week’s total production rate was estimated at 635,000 head.
Feeder cattle
The cash feeder cattle auctions were heedless of the losses posted in the feeder cattle futures. With one exception, all the surveyed auctions saw feeders sell for steady to much higher prices compared with the prior week. Demand for long-weaned calves with completed vaccination programs was repeatedly noted as strong across the country.
Medium and large 1-class (#1) steers weighing between 700-800 lbs. sold well, with prices up into the upper-$160s and lower-$170s being more than just a singular fluke. Calves were generally still at a discount to their yearling counterparts, but in some situations they led the pricing.
Colorado: Sales volume almost doubled last week compared to the prior week at the La Junta Livestock Commission Company. Light steer calves were up $5-8, with instances of $10 higher. Steer calves over 450 lbs. were up $2-3 with the exception of heavy 5-weights which saw $2 discounts. Heifer calves were steady to up $3 with preference given to light weights. Yearlings were too lightly tested for a good market test. One 16-head group of benchmark yearling steers averaged $155, while a 17-head group of benchmark calves averaged $141.73.
Kansas: The Winter Livestock Feeder Cattle Auction of Dodge City saw slightly increased sales last week with prices much higher. Heavy steers were up $5-7 where price comparisons existed. Heavy heifers were up $6-8. Calves were said to have instances of up $5-12 with the best demand on long-weaned, thin-fleshed calves with a complete vaccination program. A large batch of #1, 7-weight yearling steers averaged $158.70, while a group of calves averaged $143.86.
Missouri: Over 5,000 head sold at the Joplin Regional Stockyards last week. Compared to the prior week’s sale, all steers were called steady to up $3, while heifers of all ages were up $1-4. Fleshy bawler calves made up most of the offering. Benchmark calves ranged from $144-149.50 and yearlings ranged from $150-160.
Montana: The sales volume jumped up extremely at the Miles City Livestock Commission, seeing over 5,600 head sold last week. Given the comparatively small offering the week before, comparable sales were spotty. Light steer calves saw the best comparisons with price advances going as far as $20. There were no #1, 7-weight steers sold, but two groups of #1, 6-weight steer calves ranged between $161-172.
Nebraska: Huss Platte Valley Auction sold more cattle last week at higher prices than the week before. Steer calves were up $2-10, while yearling steers and heifer calves were up $3-7. Yearling heifers were up $3-5. Demand was high for weaned calves with full vaccination cards. Prices on benchmark steers, inclusive of calves, ranged from $160-170.
New Mexico: Over 3,300 head sold last week at the Clovis Livestock Auction, up in volume and value compared to the prior week’s sale. Light feeder steers were up $7-13, while those over 500 lbs. were up only $2-3. Similarly, light heifers were up $12-18, while heavier heifers were up only by $4-7. Benchmark calves sold between $125-149.50, while a large group of benchmark yearling steers averaged $153.45.
Oklahoma: Fewer feeders sold at the OKC West-El Reno sale last week, but the prices were higher. Feeder steers were called up $3-6, feeder heifers up $1-3, and calves of both sexes were up $4-8. Two large groups of #1, 7-weight yearling steers sold between $159.50-165.50.
South Dakota: Almost 10,000 head sold at the Philip Livestock Auction last week. Prices were mixed on feeder cattle depending on class and weight, though most were steady to up $5. The exception was lightweight steers, which were down $2-6. A group of 28 head of #1 steer calves weighing 713 lbs. averaged $168.
Texas: Sales volumes were down at the Amarillo Livestock Auction but prices were steady. Feeders were not well tested, but demand was called good. Two small packages of #1, 7-weight steer calves ranged from $131.50-136.50.
Washington: The Stockland Livestock Auction saw its sales volume almost quadruple last week compared to the prior week, making comparisons difficult. Where they were possible on stocker and feeder cattle, prices were said to be up $3-8. Demand was called very good with active buyers. Several packages of benchmark cattle sold, ranging from $138-146, inclusive of calves.
Wyoming: More cattle sold at the Riverton Livestock Auction and prices were higher on feeder cattle, though specific price comparisons were spotty. Reputation steer calves were said to be up $10-15, with pee-wees selling for as much as $25 gains. Light heifer calves were up $5-15. Two groups of benchmark yearling steers sold between $150-157, while an eight-head group of benchmark calves averaged $145.50.
As mentioned, feeder futures saw net losses, mostly coming in Thursday’s trade.
“Triple-digit losses quickly developed across most of the feeder cattle complex Thursday afternoon as … outside markets had a significant impact on the overall direction of the complex,” commented Rick Kment of DTN, referring to gains seen in the grain markets.
By Thursday’s settlement, the October feeder contract had lost a net 40 cents over the course of the week with $153.55. The November contract lost a net $1.20 to settle at $154.55. The near-term losses in the feeder futures were relatively benign. The more deferred contracts, by comparison, lost well over $2 almost across the board. — Kerry Halladay, WLJ editor
