Markets Fall Back To Reality
Market analysts can claim with a little more certainty this week that the cattle market’s seasonal tops are in. That’s because after the market’s runaway higher two weeks ago, cattle prices fell back to reality last week.
Cash fed cattle traded in the South at $137 to $138 per cwt, $5 to $8 lower than the previous week. Cattle sold out of Northern feedyards at $137 to $138 per cwt, $8 to $9 lower than last week. Dressed cattle in the North sold at $220 per cwt, down $10 to $12.
The good news for packers was the $11 advance in Choice cutout values to $247.69, and Select at $225.51. The Choice-Select spread was $22.18 per cwt. Lower cash cattle and higher beef cutout values mean packer margins advanced handsomely this week.
Feeder cattle and calves saw two different markets last week. Early in the week steers and heifers sold steady to $3 per cwt higher, while late week sales were $3 to $10 lower, with instances of $13 to $15 lower, according to AMS reporters.
“The bloom is off the rose as cattle feeders were more cautious with incoming purchase prices as deferred live cattle futures are $2 to $3 lower,” AMS reporters said. “Auction receipts (last) week were near 50,000 higher than the previous week with all of that increase due to the influx if marketings in Oklahoma, Kansas and Missouri.”
AMS reporters called the spring rally “spectacular” for fed cattle, “driven by packer competition in order to meet sold ahead positions in meat sales for domestic and export commitments. Boxed-beef values have increased sharply over the last 5-weeks but the increased values have also forced the packer to chase this market and pay up on cattle which is putting them in the red. The cut-out has gone significantly higher to compensate the higher fat cattle market gaining near $40 on Choice product since the first of April and with a $20 spread between Choice and Select the result of so many green cattle being pulled forward.”
