Last week’s markets were a bit of a disappointment. Despite projections of higher cash fed cattle prices, a barrage of theoretically good economic news, and good cattle and beef market fundamentals, cash cattle and near-term futures traded lower.
DTN’s ShayLe Stewart captured the sense of unmet expectations in Thursday’s markets.
“Remember when you learned that Santa wasn’t real? Your parents still got you presents, and you still had Christmas, but there was a sense of excitement that was never going to be the same about the Christmas holiday. Thursday was the day the market learned that Santa wasn’t real.”
She noted that Wednesday had seen the Phase One trade deal with China signed but “the market didn’t jump limit up, cash prices didn’t soar and we don’t know on when China is going to be making their purchases.”
“Just like kids need a day or two to absorb the Santa shock, the market needs its time to understand the agreement’s role.”
Similarly, passage of the U.S.-Mexico-Canada Agreement through the Senate didn’t rouse any excitement in the market.
The near-term cattle futures contracts were all down week over week. Losses in near-term live contracts were about $1 while losses in near-term feeder contracts were about $2.50. Thursday’s settlements were as follows: February live, $126.13; April live, $126.43; January feeders, $145.43; and March feeders, $144.83.
The negotiated cash fed cattle trade got underway on Thursday, selling most of the week’s confirmed 64,300 head of negotiated cash fed cattle trade hands. Prices on Thursday were about 60 cents lower than the week before at $123-125 (avg. $123.91) live and $198-200 ($199.12) dressed.
The one bright spot in last week’s markets was the cutout. The Choice cutout gained a net $2.86 to close Thursday at $212.90 and the Select cutout gained a net $4.92 cents with $211.47. At $1.43, Thursday saw one of the narrowest Choice-Select spreads in a long while.
Arguments could also be made that the cash feeder market was a bright spot. Most auctions sold fewer feeder cattle last week than the week before, and also sold for higher prices. Medium and large #1 class steers weighing 700-800 lbs. were easily averaging in the $140s, and the high end of the range got into the upper $160s.
Colorado: The Winter Livestock auction of La Junta sold 7,100 head of feeder cattle last week, up from the prior week’s 5,709 head. Prices were mixed along weight lines, with light steer calves bringing $10 higher, 4-weights bringing steady money, and heavier steers being $2-4 down. Heifers under 500 lbs. were up $3-5 with instances of $10 higher, 5-weights were up $2-4, and heavier heifers were steady to up $3. Two lots of benchmark yearling steers sold with averages solidly in the mid $140s.
Iowa: The Russell Livestock Feeder Cattle auction sold about half the number of feeder cattle last week compared to the prior week. Where comparable, light steers were up $1-2, while 7-weights were steady to up $2. Light heifers were up $2-8 while heavier heifers were steady to down $5. Two lots of benchmark steers averaged $150-151.
Kansas: The Winter Livestock auction of Dodge City sold about 2,000 head fewer last week compared to the week before. Steers were called $2-4 lower, while heifers were steady to up $2. Weaned calves saw few comparable sales. Several lots of benchmark yearling steers sold between $140.50-158.10.
Missouri: The Joplin Regional Stockyards sold half the number of feeder cattle last week compared to the week before. There were few comparable sales. Light steers were $2-5 higher and heavier steers and all heifers were called steady. Two large lots of #1, 7-weight yearling steers sold for $139.50-148.50.
Montana: Offerings of feeder cattle at the Miles City Livestock Commission were down slightly compared to the prior week, making yearling offerings too lightly tested for a market trend. Demand for yearlings continues to be strong. Steer calves were said to have a lower undertone except for 5- and 6-weights, which were $4-6 higher, with instances of $10. Heifer calves had a lower undertone on lightweights, but heifer calves over 450 lbs. were called steady to up $5. One 17-head lot of #1, 751-lb. “fleshy” yearling steers averaged $145.
Nebraska: Just under 5,800 head of feeder cattle sold last week at the Bassett Livestock Auction. This was down over 1,000 head compared to the prior week. Feeders were called unevenly steady on good demand for feeders, and high demand for replacement-quality females. Number 1, 7-weight yearling steers sold between $157.25-164.50.
New Mexico: The Clovis Livestock Auction sold almost double the number of cattle last week as compared to the week before. Steers under 600 lbs. were up $2-3 with instances of up $14 on value-added lots. Heavier steers were steady to up $2. Heifers under 600 lbs. sold up $2-5 and heavier heifers were up $1-2. Trade was called active on very good demand. Prices on yearling benchmark steers was $128-144.75, while an eight-head lot of unweaned calves sold for $130.50.
Oklahoma: The National Stockyards sold over 11,300 head of feeder cattle last week. Steers were called steady to up $2 and heifers were steady to down $3. Demand was called moderate to good. Benchmark yearling steers sold between $136-156.
South Dakota: The Sioux Falls Regional Cattle Auction sold over 6,500 head of feeders last week, up from the prior week’s 5,707 head. Light feeder steers were up $5-8 with instances of $10. Steers over 600 lbs. were called steady to up $3. Heifers were called uneven, with lights being $3-5 higher, 5-weights being $2-4 lower, midweights being steady to up $3, and everything over 700 lbs. being steady to down $2. Number 1, 7-weight yearling steers fetched $139-160.50
Wyoming: The Torrington Livestock Feeder Cattle Auction sold 5,724 head of feeder cattle. Compared to the prior week’s sale, calves were up $4-8 with instances of $11 higher. The market was called very active on good demand, especially for reputation feeder cattle. Benchmark yearling steers ranged from $151-165. — Kerry Halladay,WLJ editor
