Feeder Cattle Review: Competition Increased with Middle-weight Cattle
Compared to last week, calves and yearlings sold mostly steady to 5.00 higher, with instances throughout the trade area where the markets traded in a 5.00 higher to 5.00 lower range early in the week. Active trading this week in the major marketing areas where the full advance of the market was most evident on the middle-weight cattle weighing 500-700 lbs. Competition has increased on these cattle and grass interests are becoming more prevalent as winter’s grip is starting to ease near the major grazing areas.
This is the time of year when the term “stocker” starts to be used more often to describe cattle that are in condition to be turned-out on grass. These longtime weaned and fully vaccinated calves and froze-out short yearlings that are showing a bit more age than size along with good weighing conditions usually fit the bill.
Tuesday saw a change in direction with limit and near gains in the Live Cattle and Feeder Cattle contracts that continued into Wednesday and Thursday with good gains as outside markets all turned green. This definitely gives a boost to the markets to find renewed buying interest after last week’s lows. This week had spring like temperatures and gusty winds, which had pay loaders and box scrapers busy in helping to dry out and clean up pen conditions in the Northern feedlots. Most pens should be decent by the end of the week for new arrivals of feeder cattle. Hopefully this market can find some assurance to get its footing going into spring. Confidence in this market has long been plagued with volatility that keeps undermining any stock or reliance that the futures play in this business.
Last week did see some improvement in fat cattle being moved in Nebraska and Iowa where clean-up is needed where muddy conditions are widespread. Packer margins are holding and have done the job of buying fat cattle cheaper the last two weeks.
Boxed-beef is finding demand at this time a little hard to come by here in middle of February, is one of the worst times of the year for beef business. No doubt packers will want to keep margins on the plus side and keep them from going negative and wait for better demand going into spring. Choice boxed-beef closed Friday 1.73 lower at 211.66 compared to last Friday’s close at 216.08.
Cattle on Feed report was released Friday afternoon was pretty much neutral as anticipated by trade guess. Cattle on Feed came in at 99.8 percent; Placements at 99 percent and Marketings at 98 percent. Marketings were 2 percent below last year represented the lowest total for January since the series begin in 1996 with one less business day than last year. Auction volume included 67 percent over 600 lbs and 40 percent heifers.