Cattle markets this week suggest the worst of the price impacts from the Tyson fire in Kansas are in the rearview mirror.
Feeder cattle prices continued to bounce higher as futures prices rallied and buyer confidence improved with higher fed cattle prices.
Steers and heifers sold $4-$8 per cwt higher in the North Central and South Central regions, according to USDA’s Agricultural Marketing Service (AMS). Calves in the Southeast traded steady to $2 higher.
“Demand was much improved after the bullish Cattle on Feed report confirmed much lower feedyard placements, which is supportive for the coming months in the fed cattle market,” say AMS analysts. Those analysts note auction receipts for the week of 208,000 head were the most since April.
Week to week on Friday, Feeder Cattle futures closed an average of $5.13 higher. That makes for an average of $7.78 higher over the last two weeks.
“Yearling feeder cattle producers were feeling better about the market and willing to consign their cattle for sale,” say AMS analysts. “They’ve been able to hold their cattle on grass as grazing has been plentiful and a lack of a killing frost in northern areas have allowed yearlings to stay out on grass without losing pounds. Consignments of spring-born calves have not hit their stride yet. Demand has been moderate to good, especially for those calves on a vaccination program.”
Demand for calves to graze winter wheat is likely adding support, although planting is delayed in some areas due to dryness. According to the most recent USDA Crop Progress report, 22% of winter wheat was planted (week ending Sept. 22), which was 4% less than the same time last year and 2% less than the five-year average.
Analysts say calf prices will likely come under pressure over the next four to six weeks.
Negotiated cash fed cattle prices built on the previous week’s gains. Live prices were $2 higher in the Southern Plains at $103 per cwt, $4-$5 higher in the Northern Plains at $106-$107 and $1-$5 higher in the western Corn Belt at $104-$105. Dressed trade was steady to $5 higher at mostly $165.
Week to week on Friday, Live Cattle futures closed an average of $3.19 higher ($1.25 higher at the back to $5.67 higher in spot Oct).
Stronger cash prices are welcome but hedged cattle feeders may not experience the same gains due to lower profits in the futures market.
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 28, 2019.