The markets were doing so well last week. Everything that was moving was generally making steady gains. And then Thursday everything just took a serious tumble. All except the negotiated cash fed cattle, which remained absent throughout the week, with only 1,611 head confirmed sold for the week by Thursday afternoon.
“Livestock trade started the day relatively stable, but then things took a nasty turn the last half of Thursday’s trading session,” noted DTN’s Rick Kment on Thursday afternoon. He also noted that there was “no significant news” that might have triggered the situation, which extended beyond the cattle parts of the ag markets.
“Afternoon market liquidation eroded morning support in the live cattle trade, pushing futures $1.02-1.75 lower,” Kment continued.
By Thursday’s close, the near-term live cattle contracts stood at $124.80 for February and $126.30 for April.
Kment called the bearish activity an aggressive market correction.
“After April and June contracts set new highs Wednesday, uniform selling stepped into the market on the last trading day of January, pushing both contracts $1.75 per cwt lower. This one-day move essentially flat lines monthly live cattle futures charts, ending a consistent upward shift since May 2018. This could affect trader interest in early February.”
The Choice beef cutout also plunged on Thursday, losing almost $3 in one day to close at $215.39. The Select contract did not fair so badly, losing only 12 cents compared to Wednesday’s recent high, and actually gaining ground by about $1 compared to the prior Friday’s close.
Feeder cattle
Despite the literally blisteringly cold weather faced by many areas of the northcentral cattle country, feeder cattle sales were relatively good last week. Many auctions reported impressive week-to-week gains, though prices on medium and large #1 steers weighing between 700-800 lbs. was relatively steady with averages in the low $140s.
Colorado: The Winter Livestock auction sold fewer cattle last week compared to the week before. The steers were selling up $3-5 with instances of up $8. The exception was 3-weight calves which were steady. Heifers were in the same range as most steers, with 6-weights being steady to up $1. Heavy (700 lbs.+) yearling feeders were down $2 on steers and up $2 on heifers. There were relatively few benchmark steers, but their prices ranged narrowly from $140-144.
Iowa: The sale volume at the Denison Feeder Cattle Auction was relatively steady with the prior week’s. This was the auction’s special Western Iowa Preconditioned Calf Sale. Steer calves were steady to up $9 and heifers were steady to up $5 compared to similar lots the week before. Several lots of #1, 7-weight steers sold between $141.50-152.50.
Kansas: The Winter Livestock Auction sold more cattle last week than the week before with steers selling up $1-7. Heifers sold steady to $2 higher with the exception of 8-weights, which were down $2-4. Limited tests of steer and heifer calves brought prices $6-7 higher and $3-4 higher respectively. Benchmark yearling steers sold between $137.50-154.60.
Missouri: Receipts were drastically higher last week at the Joplin Regional Stockyards. Where comparisons were available, steers under 700 lbs. were steady, while heavier steers and all heifers were steady to $3 higher. Prices ranged from $134-150 where premiums seemed to go for large groups as much as the make-up of the benchmark steers in them.
Montana: Feeder steers were too lightly tested for a market trend last week at the Miles City Livestock Commission. Higher undertones were noted, nonetheless. The best test on heifers was for some light 5-weights, which were called generally steady. Two lots of #1, 7-weight steer calves averaged $146 for the light group and $138.82 for the heavy group.
Nebraska: The Huss Platte Valley Auction sold half again as many cattle last week as the week before, with prices mostly steady to $5 higher on feeders, with preference for heifers. The offering generally ran heavy, with respectable volumes of #1 steers over 700 lbs. Of the 7-weights, prices ranged from $139.75-153.75.
New Mexico: The Clovis Livestock Auction saw a decline in its offering. Nonetheless, light steer calves were fetching $3-7 higher, with instances of up $9 on value-added lots. Heifers under 600 lbs. were up $3-4 with instances of up $6-9 on 3- and 4-weights. Heavier heifers were up $1-2. A lot of #1, 7-weight steers sold, but mostly in small lots. Prices ranged from $128 for a two-head lot of calves, to $141.50 for a large lot of light yearlings.
Oklahoma: The National Stockyards saw more than double the volume last week compared to the week before. Steers were up $2-6 while heifers were up $2-4. Calves of both sexes were up $5-6. Numerous lots of benchmark steers sold with prices ranging from $130-150.
South Dakota: The Mitchell Livestock Auction sold half the number of cattle last week as it did the week before. Still, prices were generally steady to $2 higher. Exceptions existed for 7-weight steers (+$2-3), and 6- and 7-weight heifers (+$2-4). Demand was called good for this light offering. A few lots of benchmark steers sold between $140.50-152.
Wyoming: The number of cattle sold at the Torrington Livestock Commission declined last week, but prices were spectacularly higher in places. Steer calves under 600 lbs. sold up $6-15. Heavier steer calves were called unevenly steady on a limited test, as did heifer calves with a few instances of up $3. Many of the desirable calves were described as “green grass cattle” and saw strong demand. Only one lot of #1, 7-weight steers sold, averaging $146.52.
Near-term feeder cattle futures did not escape the Thursday losses, but they weren’t as bad. The January contract settled for the last time at $142.10, down a net $1.28 for the week. The March contract settled at $142.55, down $1.08. All of these losses were seen on Thursday.
“Any indication that the cold weather was supportive of the market evaporated as triple-digit losses flooded most nearby contracts,” said Kment of Thursday’s feeder futures losses. — Kerry Halladay, WLJ editor
