Cowboys Grip the Reins In Runaway; Prices Soar, Records Fall
Cattle feeders clearly own the current market leverage and nothing in the near term seems likely to loosen their grip. Cash fed cattle prices began the week trading above last week’s record high only to set new records with each passing day. Some feeders passed on record cash prices early in the week only to be rewarded with higher bids later. The bar was raised another $5 to $7 per cwt. with cowboys fully expecting additional gains next week.
Trade in the North led the way at $180 to $185 live and most at $182 per cwt., which is $5 to $7 higher. Dressed trade was $290 per cwt., $10 higher than last week. In the South, trade occurred at $175 per cwt., mainly $5 higher.
Feeder cattle traded higher in a wide range at $3 to $10 higher. Calves traded $3 to $10 higher.
Wholesale beef joined the parade higher. Choice boxed beef closed Friday at $302.62 per cwt., $11.64 higher for the week. Select closed Friday at $283.87 per cwt., $8.09 higher.
Expiring April live cattle futures sagged 75 cents to end the week at $174.75, while most-active June futures dropped 77.5 cents to $163.725 at Friday’s close. That marked a weekly rise of 62.5 cents. The nearby April feeder contract rallied 72.5 cents to $203.40, whereas most-active May futures gained just 10 cents to $207.90, which represented a weekly gain of $2.50.
5-day outlook: Futures traders still doubt recent fed cattle strength can be sustained, as was made evident by the discounts built into the nearby fed cattle contracts versus the week’s cash gains. The latest report stated the Monday-Thursday cash market average for fed cattle at $180.35; that topped last week’s cash mean by $7.25. The April future implies cash prices will have dropped by about $6.00 by its April 28 expiration. Traders might be right in expecting a late-month cash drop, but ProFarmer analysts believe there’s a strong chance of another sizeable cash market advance next week, since grocers traditionally tend to continue pursuing wholesale beef through noon of the second to last Wednesday of the month (April 19 in this case). ProFarmer is still inclined to expect across-the-board cattle/beef strength through the middle of next week. Most doubt producers are going to be in the mood to take weaker bids at least through midweek.
