Feeder and stocker cattle sold steady to $4 higher this week, according to the Agricultural Marketing Service (AMS). It was a comparatively light test, though, as winter weather curtailed receipts across much of the primary trade areas.
“Significantly reduced sales were reported in Oklahoma, Arkansas, Missouri and Kentucky where many stocker buyers go to fill their springtime orders,” AMS analysts explained Friday. “Unlike school districts across the Midwest, though, sale barns don’t have a lot of sessions to make up since producers in these areas are well ahead of their normal marketing schedules. In fact, many auction markets were more than happy to save on labor expense this week and plan on having only normal head counts next week.”
Feeder Cattle futures came under some pressure mid-week, related in part to a surge in corn prices, spurred by concerns that the Ukrainian conflict could cause disruptions in corn and wheat s hipments from the Black Sea regions of the Crimea and Ukraine, a major grain exporter in that part of the world.
Corn futures closed an average of 19¢ higher week-to-week through the first six contracts (10¢ to 25¢ higher), and that was with a 2¢-4¢ decline Friday as traders looked ahead to Monday’s monthly World Agriculture Supply and Demand Estimates.
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By Friday, though Feeder Cattle futures trended an average of 79¢ higher week-to-week (50¢ to $1.17 higher).
“The best demand, where tested, was for heavier stocker cattle w eighing 600-750 lbs., which was just right for hard-wintered cattle coming off dry and short wheat pastures in the Southern Plains,” AMS analysts say. “Heavily supplemented feeders coming out of grow yards farther north were not as widely accepted, although they still sold handsomely.”
Cash fed cattle sales came under pressure this week, despite continued strength in wholesale beef values (see “Winter Weather Increases Beef Prices And Volatility”). Pressure in the cash market came from lower front-month Live Cattle futures as traders turned squeamish about the sustainability of current wholesale price strength.
Prices for live cattle were primarily $2/cwt. lower than last week at $148-$150/cwt. Prices in the beef were steady to $3 lower at $237-$240/cwt.
“Cattle prices hit records earlier this year. Cattle made another run-up to new highs last week. As cattle prices rose, so did wholesale beef cutout values, generating more revenue from retailers and export buyers,” John Otte, Penton market analyst, explained Friday. “But if retailers and export buyers balk on paying higher prices, margins could be pinched along the supply chain. Fears of consumer pushback pressured cash fed cattle prices lower.”
Other than $1.72 lower and unchanged on either end of the board, Live Cattle futures closed an average of $1.40 higher week-to-week. Part of the surge Live Cattle enjoyed came with sharply higher Lean Hog futures (see “Reduced Pork-Poultry Production Helps Beef Prices”).
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