It was a mixed market last week, but with more up than down.
The near-term feeder cattle futures spent all of last week continuing the slow burn upwards they started the week before. The gains weren’t spectacular, but they were consistent.
August live settled Thursday, July 25 at $108.65, a net week-to-week gain of $1.05. Similarly, the October live contract gained $1.40 with a settlement of $109.90.
“This lazy summer action is yawn worthy, quiet and choppy on light volume,” commented Cassie Fish of the Beef Report.
“Futures are above their 10-day moving averages and the 100-day moving averages are overhead. The tempo of trading though is so slow, it does not inspire getting in a hurry about entering or exiting this market.”
That mood was evident in the cash fed cattle trade. Compared to recent weeks where cattle feeders and cattle buyers got to work early in the week, last week saw only 5,928 head of negotiated cash fed cattle sold for the whole week by close of trade Thursday. Almost all of that trade happened that day. Prices ranged from $114.50-116 (average $114.91) live and $183-185 ($183.35) dressed. This was mixed—up $2 in live and slightly weak in dressed—compared to the prior week’s sales, though the volume had not set the market trend. Expectations were for fully steady, according to Andrew Gottschalk of Hedgers Edge.
“The Corn Belt will continue to lead the price parade,” he continued, turning attention to supply.
“Front-end fed cattle supplies remain tight there relative to the South Plains. Not only are front-end fed cattle supplies below the prior year in the Corn Belt; most Corn Belt states are also below the prior month. These conditions should allow the cash undertone to remain firm into early August. Fourth quarter front-end fed cattle supplies continue to project to be above prior-year levels. As such, fed cattle producers need to maintain an aggressive marketing position. While such action may limit the upside near term, it should also prove later to limit downside risk.”
The cutouts were down slightly week over week, with Choice closing at $212.57 (-85 cents) and Select closing at $189.18 (-33 cents).
On the other hand, cash feeder prices were cautiously optimistic. Most of the surveyed auctions listed more cattle at higher prices, though it was not across the board. Average prices on medium and large #1 steers weighing between 700-800 were still solidly in the $140s.
Iowa: The Bloomfield Livestock auction sold just under 1,100 head of feeders last week. There hasn’t been a sale held for some time, so there were no market trends available. Trade was called active on good demand. Number 1, 7-weight steers sold between $143.25-153, with averages in the upper $140s.
Kansas: The Winter Livestock auction sold over double the volume of feeder cattle last week compared to the prior week, making for limited comparable sales. Despite this, a higher undertone was noted on yearling steers and 7-weight heifers were called $2-3 lower. Demand was called good to very good on the average to attractive offering. Only one 61-head lot of #1, 7-weight steers sold, averaging $140.33.
Missouri: Sales volumes had declined at the Joplin Regional Stockyards last week. Calves of both sexes were called steady to higher, while yearling feeders were just steady. Demand was called good. Benchmark yearling steers ranged from $142.50-147, while a small lot of unweaned calves averaged $130.
Nebraska: The sales volume was lower at 4,940 head at the Bassett Livestock Auction, but prices were unevenly steady on the feeder offering. Demand was called very good with a lot of buyers in the seats. Benchmark yearling steers sold between $150-172, inclusive of a large lot of value-added cattle.
New Mexico: Light steer calves were $3-4 lower last week at the Clovis Livestock Auction, while steer calves over 500 lbs. were steady to $6 higher. Light heifer calves were mostly steady with the exception of 5-weights, which were up $4. Heifer calves over 600 lbs. were up $2. Yearling feeders were called up $2-4. There were no #1, 7-weight steer lots sold, but 6-weights ranged from $131-148 and the one 8-weight lot averaged $126.62.
Oklahoma: With just under 10,000 head sold, the OKC West-El Reno sale sold feeder steers for steady money while heifers were up $3-5. Calves were poorly tested, but a lower undertone was noted. Two large lots of #1, 7-weight yearling steers sold narrowly between $141-146.
South Dakota: The Mitchell Livestock Auction more than doubled its sales volume of feeders last week, making for few comparable sales. Where they existed, they were up; 8-weight steers were up $5-9 while 7-weight heifers were up $5-8. One 7-head lot of #1, 753-lb. steers sold, averaging $163.
Week to week, near-term feeder cattle futures saw more robust gains than did live futures. The August contract settled at $142.80, a net gain of $2.82, and the September contract gained a net $3.43 with $143.23.
“The firm gains seen midweek is helping to rekindle commercial buyer support although the lack of price diversity in all nearby contracts may keep markets generally stable,” commented DTN’s Rick Kment. As of press time, there was barely a $3.50 spread across the entire feeder futures boards. — Kerry Halladay, WLJ editor
