Despite early expectations of a strong performance, the markets floundered last week.
At the outset, market watchers and analysts predicted a steady-to-higher trade on fat cattle compared to the prior week’s averages of $115.18 live and $180.40. As the week wore on, however, the optimism faded to a simple “steady” prediction.
By close of trade Thursday, even that seemed questionable with no relevant live cattle prices and $180 dressed for the 18,500 head that had been confirmed sold for the week.
“Many remain very hopeful for a Thanksgiving (only two weeks away) rally in cash cattle and boxed beef prices which will take futures back to their highs,” commented Cassie Fish of the Beef Report on Thursday afternoon. “And many are hoping today’s lows will hold between now and then.”
The Thursday live cattle future near-term lows were $115.35 for December and $119.15 for February. Those contracts settled at $116.55 and $119.88 respectively. While certainly better than the daily lows, they were down for the week compared to the Nov. 2 settlements of $117.08 and $122.20 respectively.
Fish also speculated that boxed beef prices may have topped.
“The seasonal rally in boxes, which began in early October, has leveled out. Normally boxes don’t top until post-Thanksgiving and there is hope by some that will be the case this year as well, though last year the cutout topped this week at $212.59 and broke $10 by year’s end.”
Both cutouts lost about $2.50 over the course of last week, with Choice at $216.07 and Select at $199.11 on Thursday’s close.
Feeder cattle
The cash feeder cattle market seemed to have switched gears last week compared to the week before, with many auctions seeing volumes and prices down.
Colorado: The La Junta Livestock Commission Company sold almost twice the number of cattle last week as it did the week before. Steer calves were mixed up and down $3, with light calves up and heavy calves down. The same was true for heifer calves, but lights only gained $2. Yearling feeders were too lightly tested for a trend. Most of the feeder offering was light and there were no reports of #1, 7-weight steers selling, but 6-weights ranged from $141-153.
Kansas: Sales volumes were down at the Winter Livestock Auction. There was a lower undertone on feeder steers, but not enough comparable sales for more. There was a similar situation on heifers and calves. The benchmark yearling steers sold between $148-154.75.
Missouri: The Joplin Regional Stockyards saw mostly steady sales volumes, but mixed prices. Steer calves were steady to up $4 with preference for light animals. Yearling steers were down $2-4, and heifers were steady to down $4, preference for lighter animals. Numerous lots of benchmark steers sold; yearlings sold between $150-155 while calves and fleshy yearlings sold between $137-141.
Nebraska: The Sheridan Livestock Auction more than doubled its sales last week compared to the week before. Most feeders were light and sold $5-12 higher with preference for animals under 500 lbs. The exception was 4-weight heifer calves, which were down $6. Two large lots of #1, 7-weight calves sold, with the light lot (714 lbs.) averaging $168.65 and the heavy lot (771 lbs.) averaging $161.05.
New Mexico: The feeder sales climbed to almost 5,000 head last week at the Clovis Livestock Auction. Light steer calves were mixed up and down $2. Yearlings were up $1. Heifer calves were mixed up and down $1, and yearlings were down $2-3. The offering of #1, 7-weight steers was mostly calves. Prices ranged from $120-138. The one lot of yearlings averaged $145.39.
Oklahoma: The OKC West-El Reno sale sold over 11,000 head of feeders last week with steers trading $1-3 lower and heifers selling $3-5 lower. Calves of both sexes were down $2-4. Overall demand was called moderate, but “good to very good” for weaned calves. Several large lots of #1, 7-weight steers sold ranging from $149.50-155.50 for yearlings and $136-147 for calves.
South Dakota: The Philip Livestock Auction sold almost 10,900 head of feeders last week. Steers were mostly mixed steady, with the exception of calves under 450 lbs., which were up $5-8. Heifers were steady to up $6 with preference for light calves and replacement-weight calves or yearlings. Most of the calf offering was described as “off the cow, fully vaccinated.” Several large lots of benchmark steers sold, but in two identifiable groups. The calves sold between $153.75-164 and the fancy yearlings sold between $169.75-175.
Texas: The sale volume was down at the Amarillo Livestock Auction last week. Calves sold mostly steady, but yearlings were not well tested. Three small lots of #1, 7-weight steers sold; the two calf lots sold between $122-126.50 and the trio of yearlings averaged $144.
Wyoming: The Riverton Livestock Auction sold just over 7,000 head last week. Compared to the prior week’s special calf and yearling sale, light steer calves were sharply lower at mostly $4-7 down, but some instances of down $10-14. Midweight steer calves were mixed, from up $7 to down $6. Heifers were mostly $1-3 lower, but some instances of up $5 on reputation strings. Too few yearlings for a market test. No difference was detected in prices of benchmark steer calves versus yearlings, which ranged narrowly from $150.50-151.
Much like the live cattle futures and the cutouts, near-term feeder cattle futures shed about $2.50 over the course of the week. The November contract settled Thursday at $150.18 while the January contract settled at $146.28. This was an increase from earlier in the week, with the bearish grain results of the monthly World Agricultural Supply and Demand Estimates report being credited with stoking Thursday’s feeder future activity.
“January and March futures are leading the complex higher with 80-cent gains,” reported DTN’s Rick Kment on Thursday afternoon.
“This may help to solidify additional commercial buying over the next couple of days, although little is changing in overall beef fundamentals.” — Kerry Halladay, WLJ editor
