It was mayday for the markets last week. Everything was down and still declining as the week came to a close.
Cash fed cattle trade got underway in a big way last week with over 60,000 head of negotiated cattle sold by Tuesday. That number grew to over 100,000 on Wednesday, but it still wasn’t done. By the afternoon report on Thursday, almost 142,000 head had been confirmed sold for the week, making last week the largest cash fed cattle buy seen in months if not all of 2019.
Packers were stocking up on cattle with time on their hooves and packers got them cheaper; live prices ranged from $121-126.50 (avg. $123.06) and dressed was $196-200 ($198.57). This was down about $2.50 for live and $5.50 for dressed compared to the prior week’s prices.
“Cash price support at $122 is in the process of being violated,” observed Andrew Gottschalk of Hedgers Edge.
“The next level of support is $117-118. The longer-term cash target is $108-112.”
Futures too saw declines. The April contract settled for the last time on Tuesday at $123.75, down 80 cents compared to the prior Friday’s settlement. The June contract lost about $1.50 over the course of the week with a Thursday settlement of $113.68.
“Cattle futures are trading at an ‘oversold’ level,” Gottschalk noted. “While this could lead to a short-term rally, any rebound is expected to be short-lived. On a positive note, front-end fed cattle supplies will trend lower during the summer, while closing the gap versus last year.”
The Choice cutout lost about $4 in as many days, closing Thursday at $228.80. Select lost over $4 with a close of $215.08.
“Boxed beef prices have now dropped over $5 off of their high made last week, and talk is there is a lot of beef that needs to be cleaned up,” commented Cassie Fish of the Beef Report on Thursday afternoon.
“Considering the industry is moving into a big ramp up in production, end users may benefit by being able to snap up lower wholesale prices in time for Memorial Day and Father’s Day features.
“Wholesale beef prices averaged higher in March and April 2019 than in the last three years. It now looks less certain that the Choice cutout will be able to make a new spring high in May, which normally sees more highs made than any other month.”
Feeder cattle
The feeder cattle markets—both cash and futures—did not fare any better than the fed cattle and beef markets. The feeder cattle auctions were down with losses exceeding $10 in some places. The medium and large #1 steers weighing between 700-800 lbs. were still mostly in the $140s, but steep discounts were noted on unweaned steers.
Colorado: There was no recent comparison sale at the La Junta Livestock Commission, so there were no market trends on the 1,051 head sold last week. Demand was called moderate to good on the mostly-feeder offering. One half load of #1, 703-lb. yearling steers averaged $150.
Kansas: Sales were down by volume and price last week at the Winter Livestock auction. The entire 3,200-head offering was made up of feeder cattle, but prices were down $1-4 on steers with instances of $8 lower on heavy 7-weights. Heifers saw that weight class trade steady to up $2, while heavier heifers were down $1-4. Benchmark yearling steers sold between $138-161.50.
Missouri: The Joplin Regional Stockyards sold just over 5,000 head of feeder cattle last week, fairly steady with the week before. However, prices were down considerably with yearlings trading $4-7 lower. What few calves were on offer sold unevenly steady with the report noting that there was a high percentage of bawling new-crop calves in the offering. Number 1, 7-weight steers sold between $144-155 for yearlings while the one lot of unweaned calves averaged $141.04.
Nebraska: The Huss Livestock Market sold more cattle last week than the week before, but at lower prices. Steers sold steady to down $9. The best test on heifers were for 5- to 9-weights, which were steady to down $4. Prices on #1, 7-weight steers ranged from $136.50 for a small lot of heavy, fleshy steers to $153.60 on a large lot of very light steers.
New Mexico: The Clovis Livestock Auction sold over 2,000 head, but at far lower prices than the previous week. Steers under 600 lbs. were down $6-11, while heavier steers were down $1-4. Heifers under 600 lbs. were mostly down $10-12 with an exception for some value-added 5-weights that were only down $3. Heavier heifers were mostly down $6. A lot of the #1 steer offering were unweaned regardless of weight class. For 7-weights, weaned steers ranged from $132.75-148.50, while two small lots of unweaned steers brought $125 and $140.
Oklahoma: The National Stockyards sold almost 10,000 head of feeders last week. Despite that, prices were mostly $3-7 lower on steers and $4-7 lower on heifers. Demand was called moderate on the average-to-attractive offering. Benchmark steers were offered in mostly massive lots with prices ranging from $135-150, though one small lot of “full” steers averaged $130.
South Dakota: Over 5,000 head of feeders sold at the Hub City Livestock Auction last week. Best comparisons on steers saw prices decline $4-6. Heifers were down $3-7 where comparable. Buyers were interested in replacement-quality heifers where available. Numerous lots of benchmark steers were offered, ranging in price from $135 for fleshy steers to $164.25 for value-added steers.
Wyoming: The Torrington Livestock Commission sold fewer cattle at lower money last week. Steer calves sold $3-6 lower and heifer calves were $4-7 lower. Despite this, the report noted that there were a lot of nice, long strings of reputation heifers and feeder steers on offer. Only one 81-head lot of #1, 755-lb. steers sold for an average of $158.50.
Feeder futures lost ground just like the live futures, only worse. Over the course of the week, the near-term contracts lost about $5 each with the May contract settling at $138.98 and the August contract settling at $123.80.
“The tone of the entire cattle complex continues to be bearish,” summarized DTN’s Analyst Rick Kment. — Kerry Halladay, WLJ editor
