After some concerning days of lower trade, cash fed cattle came back swinging at the end of a holiday-shortened week. Choice cutouts packed a punch too.
With markets closed for Good Friday, the bulk of cash fed cattle trade had been completed by Thursday afternoon with over 95,700 head of negotiated cash fed cattle confirmed sold. Prices on Thursday—when over half of the week’s trade happened—stood at $126-130 (avg. $129.93) live and $205-208 ($207.85) dressed. This was about $2 higher for live and $3 higher for dressed compared to the prior week’s averages, despite early week signs of cash stumbling.
“The transition from yearling placements to calf placements should have packers chasing market-ready cattle during the late spring,” projected Andrew Gottschalk of Hedgers Edge.
Cassie Fish of the Beef Report had a different vision of the future, one with more call for caution as she highlighted this year’s estimated 300,000 head more cattle to slaughter than in 2018, according to the recent Cattle on Feed report.
“Wholesale beef and retail prices are the highest heading into that supply since 2015 and 2016 respectively. Based on supply, downside risk is real for fed cattle prices in the coming months, regardless of the weather or [African swine fever in China]. With premiums stacked in the back end, there is no incentive this year to aggressively market cattle.”
Cutouts were also impressive last week, with the Choice cutout exceeding the most recent resistance level of $233 on Thursday with $233.06.
“A post-Easter advance for cutout values is expected to see Choice values challenge the next level of resistance at $239, followed by $245,” predicted Gottschalk.
Near-term live cattle futures gained a net $1-2 over the course of the week at $128.53 for April and $122.68 for June.
Feeder cattle
The few surveyed feeder cattle auctions that reported sales last week saw the prices on medium and large #1 steers weighing between 700-800 lbs. go up. The price ranges were solidly between $140-160 with averages more consistently staying in the $150s.
Colorado: The Winter Livestock auction of La Junta sold over 2,400 head of cattle last week with feeder steers mostly steady and heifers selling from steady to up $5, preference for heavier and older heifers. Two respectably-sized lots of benchmark yearling steers sold between $141.50-152.
Kansas: There were an estimated 4,000 head of cattle sold last week at the Pratt Livestock Auction. Heavy steers were up $2-4 with heifers being mostly steady to down $2. Calves were too few and too early in the season for a good trend. Number 1, 7-weight steers sold between $147.50-163.
Missouri: Over 5,000 head of feeder cattle sold last week at the Joplin Regional Stockyards. Steer calves were steady while heifer calves were up $2-4. Yearling steers were steady to up $3 while yearling heifers were steady. Several lots of benchmark steers sold between $142-160.
Oklahoma: There were over 6,800 head of feeders sold last week at the OKC West-El Reno sale. Feeder steers were up $3-5 and heifers were up $2-4. Demand was called very good on yearlings. Calves were too few for a market trend, but a higher undertone was noted. Prices on #1, 7-weight steers ranged from $149.50-161.
South Dakota: The Hub City Livestock Auction sold half again as many animals last week as the week before. The best test was on 8- and 9-weight steers, which were up $3-4. Other weights and sexes of feeders were not well compared. Demand was strong on the mostly home-raised feeders. Two lots of benchmark steers ranged in price from $147.50-160.
Wyoming: The Torrington Livestock Commission sold cattle for sharply higher prices last week compared to two weeks before. Steer calves were up $4-8 with instances of up $10. Heifer calves were up $3-7 with instances of $10 as well. The report noted that the offering was heavy with good reputation strings in good quality and condition.
Over the week, the near-term feeder futures were steady to slightly up. The April contract gained a net 27 cents to settle Thursday at $145.70, while the May contract gained a net $1.03 with a settlement of $151.53.
“The May contract led the complex higher with a 92-cent gain,” noted DTN’s Rick Kment on Thursday afternoon.
“The April 1 Cattle on Feed report showed a 5 percent increase in cattle placed in March. This was above pre-report estimates and was near the top of the range of guesses. The increase in placements is likely to be viewed as slightly bearish, although traders seem to have already factored some increased placement levels into the market over the last couple of weeks. Traders will have to wait until Monday to trade report information due to markets being closed Friday.” — Kerry Halladay,WLJ editor
