Last week saw most areas of the market come out of the gate swinging with the Choice cutout turning into the week’s heavy-hitter.
The week started with analysts predicting the negotiated cash fed trade would be no worse than steady with the prior week’s averages of $110.12 live and $172.93 dressed. As the week progressed, market watchers were left to guess at what Friday afternoon might produce, as not even 10,000 head had been confirmed sold for the week by close of trade Thursday.
Prices on Wednesday, which saw the bulk of the trade confirmed by press time, ranged from $109-112 (average $110.58) live and $175-176 ($175.46) dressed. Given the light volumes, however, these prices cannot be trusted to be an accurate market trend.
“Most cattle feeders are resisting $111-112 live/$174-175 dressed packer bids, opting to price cattle at $115 live/$180 dressed,” reported Troy Vetterkind of Vetterkind Cattle Brokerage on Thursday morning.
“I suspect we’ll see trade somewhere in the middle as showlist numbers are in no way burdensome this week, packers on the Southern Plains are a little short bought, and boxed beef prices are marching higher.”
Choice cutout marched to the tune of $5 higher last week, going from $207.93 on Friday, Oct. 19’s close to $213.10 on Thursday, Oct. 25. The Select cutout was less impressive, but still posted $4 gains with a Thursday close of $198.31.
Near-term live cattle futures were less impressive last week, yo-yoing day to day to settle Thursday at $113.35 (+$1.10) for October and $117.08 (+30 cents) for December.
“Given the lethargy that plagues CME cattle futures, it would be easy to overlook the bullish fundamental facts released this week,” commented Cassie Fish of the Beef Report.
“As of the week ended Oct. 13, 2018, the fed slaughter totaled 515k head, 20k head larger than a year ago and larger than expectations. At the same time, slaughter weights dropped for steers and heifers, steers down 4 pounds from the prior week at 899 pounds, 3 pounds above a year ago and 2 pounds below the five-year average. A kill this big puts front-end cattle supplies in a more current state, even with the following week’s cuts.”
Last week was expected to have a total weekly kill of 635,000 head, with 499,000 head of that being fed cattle.
Feeder cattle
Cash feeder cattle were mixed but more down than up last week. Fewer auctions had medium and large #1 feeder steers weighing between 700-800 lbs. to report. Where they did, there was a notable two-tier nature to the sales between calves and yearlings with calves generally seeing a $10 discount compared to yearlings.
Several sales also reported disparities in the feeder calf market, with premiums going to weaned calves and discounts going to un-weaned calves. There was likely some distortion of the heifer market numbers as a few sales reported buyers were looking at heifers as potential replacements rather than feeders.
Colorado: The La Junta Livestock Commission sold over 4,000 head last week. Compared with the prior sale, feeder calves of quality and condition were called steady, while un-weaned calves were discounted $3-5 with instances of $8-10 lower. Yearlings were down $3-5 for both sexes. Only one lot of benchmark yearling steers (13 head at 716 lbs.) averaged $152.
Kansas: The Winter Livestock Auction sold almost 6,100 head last week with prices mixed compared to the prior week. Nine-weight yearling steers and 7-weight yearling heifers were up $1-3. Other comparable weights were called steady to lower. Steer calves were called $3-5 lower, while heifer calves were called $5-10 lower. Un-weaned calves were specifically said to have a weaker undertone.
Missouri: Joplin Regional Stockyards sold almost a thousand head more cattle last week than the week before at 5,728 head. Feeders were called firm to up $5, with instances of $10 premiums on weaned lots. Number one, 7-weight yearling steers sold between $127 for a small lot of fleshy, heavy yearlings, and $161.50 on a large lot of light yearlings.
Montana: The Miles City Livestock Commission sold slightly fewer cattle last week compared to the prior week, with prices called uneven. Light calves were too lightly tested but described as having a higher undertone. Midweight calves were up and down $3, with heavier calves discounted by $4-8. Yearling feeders were too lightly tested for a market trend. One lot of five head of #1, 710-lb. steer calves sold for $152.50.
Nebraska: The Huss Platte Valley Auction sold steer calves steady to $5 lower and heifer calves $3-6 lower. No market trend was given on yearling feeders. Two large lots of #1, 7-weight steer calves ranged from $145-156.25, and two small lots of benchmark yearlings ranged from $155-160.50.
New Mexico: The Clovis Livestock Auction sold 1,000 head fewer feeder cattle last week compared to the week before. Light steer calves were down $5-11, while those over 500 lbs. were down $1-3. Heifer calves were down $1-7 and $5, respectively, along similar weight groups. No comparison was available on yearling feeders. Number 1, 7-weight steer calves ranged from $125.50-138.50. Benchmark yearling steers ranged from $145-151.
Oklahoma: The OKC-El Reno sale sold yearling feeder steers steady to down $3 with preference going to steers over 850 lbs. Yearling heifers were up $4-6. Weaned steer calves saw premiums of $6-10, while heifer calves of any sort were up steady to firm. Demand was called very good for long-weaned calves. Benchmark steers ranged from $139-153 for calves and $155-162.25.
South Dakota: Over 11,300 head of feeder cattle sold last week at the Philip Livestock Auction. This sale volume was almost half again larger than the prior week’s. Light steer calves were down $8-15, while heavy steer calves and midweight yearlings were steady to $6 lower. Heifers followed a similar pattern, with the exception of heavy heifers over 850 lbs. were steady to up $4. A 20-head lot of #1, 758-lb. steer calves sold for $153.
Wyoming: The sale volume at the Riverton Livestock Auction last week was almost double what it had been the week before at its special calf and yearling sale. As such, there were not enough comparable sales on yearling steers for a market trend. Steer calves were down $3-4 with instances of $6-10 lower. Heifers were down $3-7 on calves and up $3-4 for yearlings and instances of up $8. Interest was particularly strong on replacement quality heifers. Benchmark steers ranged from $141-152, inclusive of calves.
The near-term feeder cattle futures were the one area of noticeable weakness in last week’s market. Over the course of the week, the October contract lost about 70 cents with a Thursday settle of $153.98 and the November contract lost 15 cents at $153.95. — Kerry Halladay, WLJ editor
