Despite what some considered to be a bearish Cattle on Feed report the previous Friday, feeder cattle prices and futures charged ahead again this week.
The CME Feeder Cattle Index jumped $4.62 higher week-to-week, closing Friday at $178.55. Feeder Cattle futures increased an average of $3.05 across the board week-to-week.
Stocker and feeder cattle sold unevenly steady to $3 higher, according to the Agricultural Marketing Service (AMS).
“The average price for 6-weight steers in the South Central Region and for 5-weight steer calves throughout the Southeast was slightly lower. Softer fall-born new-crop calves are making their way onto the scene and widening the price spread against the rugged old-croppers,” AMS analysts explained Friday. “Nevertheless, most top-quality, 600-lb. steers with a longtime-weaned and lightly-fleshed condition suitable for grass yielded prices north of $2/lb. near the major grazing regions.”
Calf and feeder prices received plenty of support from the cash fed cattle market, which was $2-$4 higher. Prices reached new record-highs in the Northern Plains at $154/cwt. on a live basis. Dressed prices in Nebraska were $244-$245/cwt. Live prices in the Southern Plains were at $150-$152 (see “Fed Cattle Prices Record-High Again”).
Live Cattle futures closed an average of $2.00 higher across the board.
“Feedlots remain very current as they have been pulling cattle ahead all winter,” AMS analysts say. “In fact, handsome markets have prompted cattle producers at every level to sell cattle ahead of schedule. Most auction markets are reporting lower-quality cleanup offerings, which is indicative of exhausted supplies.”
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Packers may feel less aggressive next week, though, as wholesale beef values began to soften by the end of this week
On Friday, Choice boxed beef cutout value was $5.70/cwt. lower week-to-week at $234.46/cwt. Select was $6.32 lower at $227.34.
Still, AMS analysts say, “As high as yearlings are, there is reason to believe that prices could escalate even further this summer.”
Besides tight cattle supplies, one reason continues to be higher pork prices than expected due to reduced pork production from the Porcine Epidemic Diarrhea virus (see “Pork Production Remains Murky”).
“Some analysts are projecting that early fall slaughter hog supplies could be 15%-25% lower than last year,” AMS analysts say. “The results of the pork industry’s struggles could allow all-time record-high beef prices to actually have an advantage in fall meat cases.”
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