USDA Cattle on Feed Bearish
Corbitt Wall gave his weekly USDA National Feeder and Stocker summary. Wall said that feeder cattle and calves over 600 lb. sold steady to $2 lower and it looks like markets are starting to level off. The light weight calves were higher again this week, selling $4 higher.
We saw heavy receipts this week. Oklahoma City had 15,000 feeders and we saw other huge auctions. However, receipts are showing that our runs are going to dry up. A lot of light weight calves are in those runs along with several cattle coming off wheat that normally wouldn’t be sold until the middle of March.
We’re still seeing "crazy high prices" and the fat cattle market was wild, gaining $5-7. Since Christmas, fats have gained $17 to $20 and dress sales has gained $34. It is a very impressive fat cattle market and packers have gotten aggressive in securing cattle. Additionally, feed yards have gained all market shares with very little leverage.
Texas, West Oklahoma and New Mexico sold only 6.1% negotiated cash, all the rest were a type of formula or contract method. Kansas sold 21% negotiated cash, Nebraska sold 36.4% and Iowa sold just over 54% negotiated cash. We’ve gained a lot of market shares just on sheer tightness of numbers.
Box beef values jumped in the last 2 weeks and topped out at $240.09, which is a record. But packers are still making money and feedlots are making a lot of money, which they need and are "tickled to death that they’re making money."
The Cattle on Feed report this past Friday was slightly bearish as all three categories leaned toward the bearish side.
Watch Corbitt Wall’s full report and link over to Beef Today’s Cattle Markets Center for more markets coverage.
