It was a “slow and steady (hopefully) wins the race” sort of feel in the markets last week. Cutouts steadily gained and cash fed cattle were generally inactive. Futures were mixed.
By close of trade last Thursday, it was clear the negotiated cash fed cattle market was playing another round of “Friday Afternoon Sales” because only 6,500 head had been confirmed sold for the week.
Wednesday saw some live trade at $123-125 (average $124.80), which was up almost $1 from the prior week. But Thursday saw some dressed trade at $196, almost $1 lower than the prior week.
“Trade volume will develop at ‘steady at best’ price levels versus last week,” opined Andrew Gottschalk of Hedgers Edge on Thursday morning.
“The trend bias for prices remains ‘up.’ However, it will take another bout of adverse winter weather to propel prices higher in the near term. Also, given the recent sharp advance in total open interest, the likelihood of a near-term period of price consolidation or limited correction cannot be ruled out. Initial cash price support is $117-118, followed by $110-111. As such, any price retreat should prove to be short-lived.”
Near-term live cattle futures lost roughly $1 over the course of last week, with the February contract settling at $125.35 and the April contract settling at $126.47.
Beef cutout prices were steadily rising every day last week. By the close of trade Thursday, the Choice cutout had gained over $4.50 with a close of $217.75. The Select cutout gained a net $2.69 over the course of the week to close with $212.14.
Feeder cattle
Last week’s feeder cattle auctions felt like they were pulling back after the big post-New Year’s sale explosion. Most of the surveyed auctions sold fewer cattle for less money even while noting good demand from buyers and improved weather.
Medium and large #1 steers weighing between 700-800 lbs. were still solidly averaging in the low-$140s with buyers seemingly choosier about weights, lot size, and age. Calves were notably discounted compared to similar yearlings.
Colorado: Last week, sales were half of what they had been the week before at the Winter Livestock auction of La Junta. Where comparable sales existed, steer calves were called uneven, ranging from up $2 to down $3. Heifer calves were steady to up $2 with some instances of up $5-8. Yearlings ranged from up $2 to down $2 with steers being preferred. Number 1, 7-weight yearling steers sold between $138.50-146.
Kansas: The Winter Livestock Auction sold 2,514 head, with steers selling steady to up $4. Heifers were up $2-3. Steer calves were down $3-4 on a limited test and there were too few heifer calves for a market trend. Two large lots of benchmark yearling steers sold with averages solidly in the $141-143 area.
Missouri: Last week’s sale volume at the Joplin Regional Stockyards was a third of what it was the week before at 2,920 head. Steers were called unevenly steady, while light heifers were steady to up $3. The winter weather was credited with the slim cattle turnout. Number 1, 7-weight yearling steers sold between $142.25-145.50, while a four-head lot of steer calves averaged $133.
Nebraska: The Huss Platte Valley Auction was roughly steady on its sales volume but saw feeder steers sell steady to up $2. Heifers were steady. A large crowd of buyers was on hand for the special feeder cattle sale which included a special Red Angus segment. Benchmark steers ranged from $140-158.50.
New Mexico: Volumes were down over 1,000 head last week at the Clovis Livestock Auction compared to the week before. Steers were mostly $2-4 higher except for those over 700 lbs., which were unevenly steady. Heifers were mostly steady to down $2 except for heavy 3-weights, which were up $4. Trade was called active on good to very good demand. Benchmark yearling steers ranged from $134-139. A pair of #1, 7-weight calves averaged $116.
Oklahoma: The National Stockyards sold just over half the volume last week as it did the week before at 5,078 head. Yearlings of both sexes were down $206 with the exception of 6-weight steers, which were up $1. Steer calves were steady to $6 higher while heifer calves were mixed down $5 to up $2. Demand was called moderate to good, and especially strong on long-weaned steer calves. Prices on #1, 7-weight steers ranged from $133.50 for a small lot of calves to $145 for light yearlings.
South Dakota: The Philip Livestock Auction sold almost double the number of cattle last week as it did the week before. Feeder prices were drastically lower, with steers ranging from a few steady to some seeing discounts as high as $10. Heifers were down $3-6. Despite this, demand was called very good. Averages on benchmark yearling steers were solidly in the mid-$140s.
Wyoming: The Torrington Livestock Commission sold 4,416 head of cattle last week, down from the 5,651 head sold the week before. Steer calves were down $3-5 on a light test with the exception of 7-weights, which were up $4. Light heifer calves were steady to $2 lower, while heifer calves over 650 lbs. were called unevenly steady with instances of $3 higher. Two large lots of benchmark yearling steers sold between $141-155.
Unlike cash feeders or live futures, feeder futures were generally up a couple dollars last week. The January contract gained a net $2.33 to settle Thursday at $143.78, while the March contract settled at $144.33, a net gain of $1.50 compared to the Jan. 18 settlement.
“Feeder cattle futures, which have been severely beaten down during the first three weeks of 2019, have regained some life with prices rallying over $3 per cwt as traders try to focus on longer-term support and continued firmness in the live cattle trade,” said DTN’s Rick Kment on Thursday afternoon. — Kerry Halladay, WLJ editor
