Fall Rally Continues For Fed Cattle

Cattle in a Kansas Feedyard ( CAB )

Cash fed cattle traded in the South at $108 to $109 per cwt. Friday, $1 to $2 higher. Trade in the North was at $108 to $109 live, and $170 dressed, also $1 to $2 higher. Fed cattle have advanced $5 to $6 per cwt. over the past three weeks.

Estimated weekly cattle slaughter was 637,000 head, compared to 648,278 last year. The total year-to-date was 24.814 million head, 4.1% below last year.

December live cattle futures were down 2.5 cents to $112.60 and February fell 70 cents to $114.30. December live cattle rose $1.50 this week but February was down 42.5 cents. November feeders fell $3.325 this week to close at $135.525.

Choice beef cutout values closed Friday at $214.06 per cwt., $4.84 per cwt. lower than last Friday. Select closed Friday at $199.82 per cwt., down $6.79 per cwt. The Choice-Select spread was $14.24 per cwt.

Steer and heifer calves sold $1 to $3 lower at auctions this week, while yearling steers and heifers sold steady to $1 lower. AMS reporters said the fall calf runs are underway, with the supply of feeders “moderate and demand was moderate to good.” They noted the best demand was found on “yearlings that are able to fit the April CME contract.”

Weather continues to be a factor on cattle markets. “Most areas in the country have been designated as a drought area in some shape or fashion,” AMS said. “Ranchers in Nebraska sold a considerable amount of calves this week as special calf sales were happening in the Central and Western parts of the state and they sold almost 29,000 feeder cattle this week at USDA reported auctions.  Dry conditions in the state have now put over 98 percent of the state in some sort of drought designation; the highest percentage since July 2013.  With that type of drought, ranchers take into consideration how much forage stocks are available and if it is worth it to keep open or short bred cows around to the next calving season.  The question moving forward will be how many cows will leave the farm and go to harvest with a rancher exposed to paying more to keep cows around this winter than he has in the past.  Some winter forage piles have started being used already and the calendar shows only the middle of October.”

Auction receipts this week were 228,400, compared to 207,200 last week and 218,500 last year.