Declining wholesale beef prices continued to pressure cattle futures and cash fed cattle prices last week. Those same factors also poured cold water on demand for cash feeder cattle early in the week.
According to the Agricultural Marketing Service (AMS) Friday, feeder cattle weighing more than 750 lbs. opened the week slightly lower but closed steady to $2 higher following the midweek rally in the CME cattle futures.
“Calves and short-yearling stockers sold $3-$8 higher on their continued path to the moon as grass interests aggressively bid on cattle as if it were mid-March,” AMS analysts say. “Buyers placed premiums on the thin-fleshed calves even though the groundhog promised another six weeks of winter.”
AMS analysts go on to explain the steer-to-heifer discount is the narrowest in recent memory. Steer buyers are on one side looking for ways to cheapen averages on mid and lower quality while replacement buyers are bidding aggressively on the other side seeking the highest quality.
Choice boxed beef cutout values ended the week $1.01 lower week-to-week at $182. Select boxed beef cutout values closed $1.14 lower week-to-week at $175.56.
Late Friday, traders were playing cat and mouse between wonderments about lower cash fed cattle prices and how the winter storm through the mid-plains might weigh on performance and/or disrupt near-term supply.
In late-week trade, as of Friday afternoon, cash fed cattle traded mostly $1 lower than the previous week on a live basis (mostly $123). On a carcass basis, prices were $2 lower at $198.
Editor's Note: This article is part of a new weekly e-newsletter called Cattle Market Weekly. Find the full issue here and listen to the audio recap here.