Prices for calves and feeder cattle drooped lower this week, pressured by a break in futures, which came on the heels of last week’s monthly Cattle on Feed report. Higher placements were expected but the 10% increase weighed on psychology as wholesale beef values turned softer.
Calves traded mostly steady to $5 per cwt lower, according to the Agricultural Marketing Service (AMS). Yearlings sold steady to $5 lower early in the week and then mostly $3-$8 lower.
Harsh winter weather in the Central Plains and Northern Plains reduced receipts at some auctions and restricted cattle movement during the holiday-shortened week.
“Cattle futures reached an overbought status and had five straight sessions of losses, before closing higher on Thursday,” AMS analysts explain. “As futures turned defensive on a bearish reversal it definitely put stress on the feeder cattle market.”
After $2.75 lower in soon-to-expire March, Feeder Cattle futures closed an average of $7.99 lower across the board; most of the losses coming last Friday and Monday.
Live Cattle futures closed an average of $3.78 lower week to week.
Following the previous week’s rally, wholesale beef values turned sharply lower.
Choice boxed beef cutout value was $7.45 lower week to week on Friday afternoon at $224.36 per cwt. Select was $7.44 lower at $214.89. That’s about where price levels were two weeks ago.
Though too few to trend, live sales were $2-$4 lower in Nebraska and Iowa-Minnesota at $135-$137. Limited dressed sales in those regions were $4-$5 lower at $218.
Live sales in the Southern Plains on Thursday were mostly $3 less than the previous week at $136.
Beef production in February (1.89 billion pounds) was 7% more than the previous year, according to USDA’s National Agricultural Statistics Service this week. Cattle slaughter (2.29 million head) was up 5%. The average live weight for the month was up 17 pounds at 1,372 pounds.
On the other hand, frozen beef supplies appear to be less burdensome.
Total pounds of beef in freezers on Feb. 29 were down 5% from the previous month and down slightly from last year, according to the monthly USDA Cold Storage report released yesterday.
Total red meat supplies in freezers were down 3% from the previous month and down 5% from last year.
Total frozen poultry supplies were up 3% from the previous month and up 10% from a year ago. Total stocks of chicken were down 2% from the previous month but up 11% from last year.
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