Cattle Market Weekly Audio Report for Oct. 5, 2019

Variable prices at markets, but gains reported

Wes Ishmael

October 5, 2019

Fed cattle prices continued to gain this week, while calf and feeder cattle demand wobbled with upward grain price momentum.

Steers and heifers sold uneven from $1 per cwt lower to $3 higher, according to the Agricultural Marketing Service (AMS).

“Demand was best for yearlings coming off grass in the Dakotas and Nebraska,” say AMS analysts. “Higher discounts than the normal trends were noted on fleshy, un-weaned calves.”

For instance, with looming seasonal calf health challenges, un-weaned light 6-weight steers sold about $10 in back of weaned counterparts in Tuesday’s sale at Ozarks Regional Stockyards in West Plains, Mo. That was on Medium and Large #1s.

“Poor pasture conditions, coupled with the increase in calf numbers coming to market, is placing downward pressure on prices,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Many stocker and backgrounding operations in the Southeast that depend on grazing to provide some portion of the feed resources have slowed purchases because pastures have had no opportunity for fall growth.”

Drought continued to deepen in the Southeast, Southwest and Texas last week, according to the U.S. Drought Monitor. According to the most recent USDA Crop Progress report (week ending Sept. 29), 45% of the nation’s pasture and range was rated in good or excellent condition, which was 2% less than a year earlier; 25% was rated as poor or very poor, which was 2% more than a year earlier.

Incidentally, 39% of winter wheat was planted, which was 2% less than the previous year but 1% more than the average. 11% had emerged, compared to 12% last year and 13% for average.

Except for 52¢ higher in Aug, Feeder Cattle futures closed an average of $1.13 lower week to week on Friday (45¢ lower at the back to $2.35 lower in spot Oct). Much of the pressure came from Corn futures moving higher. They were an average of 12 cents higher through the front four contracts week to week; about 24 cents higher in the last two weeks. That was in response to the quarterly USDA Grain Stocks report.

The CME Feeder Cattle Index continued to increase, up $1.83 week to week on Thursday to $143.60. That’s $5.07 higher in the last two weeks.

Fed cattle prices climb

Negotiated cash fed cattle prices extended gains this week, with live sales in the Southern Plains $4 per cwt higher in Kansas at $107 per cwt and $3-$4 higher in the Texas Panhandle at $106-$107. Dressed trade in Nebraska and early dressed sales in the western Corn Belt were $5 higher at $170.

Week to week on Friday, Live Cattle futures closed an average of 92¢ higher (20¢ higher to $2.32 higher in spot Oct).

Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, October 5, 2019.

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