Continued strength in Feeder Cattle futures and firmer cash fed cattle prices sparked more buyer willingness to pay for calves and feeder cattle this week.
Nationwide, steers and heifers sold $2-$7 per cwt higher, according to the Agricultural Marketing Service (AMS). Analysts there note that demand for yearlings and calves improved throughout the week.
Week to week on Friday, Feeder Cattle futures closed an average of $2.65 higher ($1.12 to $3.82 higher in spot Sep). That’s an average of $5.94 higher over the last two weeks. The September futures contract finally moved to a higher level this week than before the Tyson fire.
Also week to week, the CME Feeder Cattle Index price increased $2.44 to $138.53
Although current futures prices likely include at least a portion of the expectations heading into the Cattle on Feed report (see “Feedlot placements…”), those numbers should be friendly enough to be at least neutral.
“Most lots of yearlings are coming off copious amounts of summer grass that have been available all summer,” say AMS analysts.
Banking on a continued rally could be a tall order, though.
“Weakness in fed cattle prices will likely affect feedlots’ pricing of feeder cattle,” say analysts with USDA’s Economic Research Service (ERS), in the monthly Livestock, Dairy and Poultry Outlook released this week.
Negotiated cash fed cattle trade through Friday afternoon was firmer to higher than the previous week with live sales steady to $1 higher in the Southern Plains at $101 per cwt., $1-$2 higher in the Northern Plains at $102 and steady to $2 higher in the western Corn Belt at $100-$104. Dressed trade was $2-$7 higher in Nebraska at mostly $162. It was steady to $5 higher in the western Corn Belt at $160-$165.
Week to week on Friday, except for 37 cents lower in away Dec, Live Cattle futures closed an average of 58 cents higher (10 cents to $1.27 higher in spot Oct). With the spot month up $1.27, there are plenty of hopes the post-fire ebb is established.
Listen to Wes Ishmael's Cattle Market Weekly Audio Report every Saturday morning on the BEEF magazine website. This is your report for Saturday, September 21, 2019.