Given how markets started, many will chalk this week up in the victory column.
As suspected, cattle futures took a dim view of last Friday’s Cattle on Feed report, which indicated significantly more August placements than expected, at least on a percentage basis. However, a day following limit-down and near-limit-down moves, stability returned. On Wednesday, they closed sharply higher. The dip on Friday likely had plenty to do with month-end and quarter-end position squaring.
Along the way cash feeder cattle sold mostly uneven from $4 per cwt lower to $4 higher, according to the Agricultural Marketing Service (AMS). The swing was wide, as much as $8 lower early in the week and as much as $7-$8 higher later. Heavy rain and mud hampered receipts at some weekly auctions in the Southern Plains.
Bawlers continued to face pressure as the weather transitions to wide daily temperature gyrations; demand was described as steady at best.
Keep in mind that calf and feeder cattle prices continue significantly higher year over year. In the North Central region, prices are about 17-23% higher across the different weight classifications in USDA’s most recent National Weekly Feeder and Stocker Cattle Summary. They’re 16-18% higher in the South Central; 23-26% higher in the Southeast.
“Demand for feeder cattle and yearlings was moderate to very good, with many headed home to farmer feeders,” AMS analysts say. “Corn harvest is in full swing, with farmers looking to feed part of their corn crop to livestock, especially with the
lower grain prices across the country.”
Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, SEPT. 30, 2017.