Feeder Cattle Review: Bullish cattle-on-feed report fuels fire

Compared to last week, feeder cattle and calves sold 3.00-8.00 higher with the full advance on yearlings which were actually higher than two weeks ago and ended up gaining ground through last week's knee-jerk correction.  Calf sales were still slightly lower than the week after the 4th which led into last week's divot in this summer's steadily rising feeder cattle swing.  Despite attempts by naysayers and techno-chart readers suffering from acrophobia (fear of heights), nothing trumps good ol" supply and demand when tracking prices for publicly traded commodities.  There is simply a larger desire to own additional levels of beef cattle and products than the current availability, at every level.  Market-ready fed cattle supplies are extremely tight and packers could no longer play coy as they were lighting up the phones of prospective sellers Wednesday night. 

By Friday, the direct slaughter cattle market was a full 9.00 higher than the previous week with late sales from 164.00-166.00.  The rallying dressed beef market allowed this advance as boxed beef cut-outs gained 8.00-12.00 this week with good demand as wholesalers allowed themselves to get short-bought.  On the Northern Livestock Video from Billings, MT the Galt Ranch from White Sulphur Springs sold near 600 head of Waygu X steer and heifer calves to weigh 435 lbs in late October for 402.50.  On Wednesday, Bassett, NE quoted 136 head of fancy 600 lb steers at 300.00 and Thursday in Mitchell, SD they had nearly 400 head of Large frame and thin fleshed grass yearling steers weighing 1000-1100 lbs which averaged 206.39.  Top selling new pickup accessories this year will include gooseneck balls, flat-beds, and bale spikes; rather than fuel tanks as crops and livestock rarely flourish at the same time.  Friday's cattle-on-feed report was bullish and added even more fuel to the fire with July 1st inventories less than expected at 97.6 percent of last year, while placements came in well under industry expectations at 93.8 percent of 2013, and fed marketings were slightly higher than thought at 98.2 percent of the same timer a year ago.  The mid-year cattle inventory report showed 95 million total cattle which was down 3 percent from two years ago (latest available comparison).  There were 29.7 million beef cows (also down 3 percent) and shockingly beef replacement heifers were down 2 percent from July 2012.  The 2014 calf crop was projected to be down 1 percent from last year at 33.6 million head.  This week's reported auction volume included 43 percent over 600 lbs and 40 percent heifers.