Calf and feeder cattle demand continued to diverge this week as buyers lay in calves destined for grass, while feedlots continue to struggle with tough pen conditions.

“Grazing calves in the Southeast were in demand again this week as ranchers are wanting to get cattle procured so they can be ready to turn out when the first sprig of green grass appears,” said analysts with the Agricultural Marketing Service (AMS).

On the other hand, the AMS reporter on hand for Thursday’s sale at Mitchell Livestock Auction in South Dakota explained, “Cattle feeders are faced with higher cost of gain this winter due to the tough weather and are worried about the impending muddy yards when the warm-up finally comes.”

Earlier in the week, the AMS reporter for Tuesday’s sale at Kingsville Livestock Auction in Missouri noted, “Heavier feedlot-bound cattle found lighter demand over the past few weeks as they are facing the summer-low fed contracts (Live Cattle), and pen conditions have yet to improve through the difficult winter weather.” Steers weighing more than 775 pounds sold $2-$5 lower, while buyers bid as much as $10 higher for grazing-type steers weighing 550-625 pounds.

Nationwide, steers and heifer sold $2 per cwt lower to $1 higher in the North and South Central regions of the country, according to AMS. Prices in the Southeast were $3-$7 higher.

Related:Fed cattle prices climb

The CME Feeder Cattle Index ended the week at $139.23, the lowest level since June 1.

Week to week on Friday, Feeder Cattle futures closed an average of 75 cents lower through the front three contracts (25 cents lower to $1.67 lower in spot Mar) and then an average of 99 cents higher. The front two contracts were an average of $1.37 lower Friday. Part of the pessimism might have been tied to the increased number of cattle outside feedlots and the notion that some of the supply may be frontloaded.

Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, Mar. 2, 2019.