Markets last week looked like a good old-fashioned roller-coaster: mostly higher, to mixed, to sharply lower, to sharply higher, to mixed again.
Feeder Cattle futures traded an average of $4.54 from high to low across the board during the week. That included a limit-up move on half of the contracts Thursday. Live Cattle futures traded an average of $3.19 from high to low across the board.
“We need to be prepared for as much or more volatility,” Kevin Good, Cattle-Fax markets analyst, told folks at the recent annual meeting of the Texas and Southwestern Cattle Raisers Association. He pointed out that volatility in fed cattle prices last year meant a week-to-week change in fed cattle value of $40/head about a third of the time.
Consider the previous week’s $3-$4 slide in live fed cattle prices that gave way to narrowly lower prices early last week before ultimately leaning from either side of unsteady to $1 higher at $122-$124. Dressed prices that nosedived $8/cwt. the previous week held steady at $194 to jump $6/cwt. to $200/cwt.
Support in the fed cattle market was based in part on positive weekly beef exports and lighter weekly average carcass weights. However, this support ran counter to continued struggles in the wholesale beef market, which keeps searching for the market low.
Thursday Choice boxed beef cutout values melted to their lowest level ($176.70/cwt.) in about eight months.
“…Packers are struggling to keep dressed beef cutout values within shouting distance of the whole dressed carcass ($177 vs. $195), and at the same time keep from tipping their short-bought hand to feedlot managers yearning to return the fat market to $130,” USDA Agricultural Marketing Service (AMS) analysts say.
Tottering fed cattle sales, wobbly futures and continued domestic demand concerns made for an up-and-down week at auctions, too, as calves sold steady to $3 lower, according to AMS. Analysts there note the winning or losing side of the week’s uneven trade had plenty to do with geography and sale timing.
“Midweek sales saw a mixture of continued pressure and recovery as places like Colorado saw moderate market loss for the second straight week,” AMS analysts say. “Just across the line in Kansas, the major yearling auction markets regained a large portion of the previous week’s sharply lower price levels with gains of as much $6/cwt.”
Auction market pressure also came with seasonal declines in auction receipts and grass orders, as well as the growing supply of new-crop calves.
On the other hand, AMS analysts noted Friday, “Up north in the Dakotas, demand is still rampant for open replacement heifers, with a large portion of the top-quality girls still heading back to the country from area feeder auctions.”