Cattle Market Notes: Week Ending Feb 22, 2013


Cash Cattle:

Cash trade was near nonexistent as of Friday afternoon as a snowstorm brought movement to a halt. Sales in the Texas Panhandle were steady on Wednesday at $123/cwt. All other locations had too limited volume to call any trends. Prices last week were: Kansas, Nebraska and Western Cornbelt live cattle trade was at $123/cwt, while Nebraska and Western Cornbelt dressed cattle were at $196/cwt. The five-area price for this week was slightly lower at $122.76 on a live basis compared to $122.81 last week and at $195.58/cwt versus $195.86 last week for dressed.

Feeder steers were steady to $1/cwt higher, while steers over 900 pounds were $1-$2/cwt lower in Oklahoma City. OKC feeder heifers were $2-$4/cwt higher, steer calves were $2-$4/cwt higher, and heifer calves were called steady to $2/cwt lower. In Mississippi auction markets feeder steers and heifers were $1-$5/cwt higher. Cull cows were steady and bulls sold $1-$3/cwt higher.

Futures:

Live cattle futures finished lower this holiday shortened week. Markets were closed Monday but moved higher on Tuesday. The next two days saw prices slip as cash prices either failed to develop or were called steady to lower. A massive snowstorm across much of the feeding region did slow the pace of sales and could hamper the continually growing slaughter weights. A recent uptick in export sales helped boost prices Friday as traders awaited the monthly Cattle on Feed report from USDA. The report showed the number of cattle in feedlots with 1,000 head or larger capacity as of February 1, 2013 down 6% versus last year at 11.073 million head. Placements into feedlots during January were 2% above last year, while marketings during the month were up 6%. Pre-report expectations looked for the placements number to be less than reported but for marketings to be lower as well. In the end, the on feed number was almost spot on with expectations. Given that placements were higher than forecast, that could push more distant contract months lower to start the week.

Corn futures were lower again this week, but prices are dropping at a very slow pace. The snowstorm that blanketed the Plains and Midwest should help many drought plagued areas as planting approaches. Another bear that has hung around is that ethanol production continues to be sluggish. With March approaching all eyes will begin to focus squarely on the planting number due at the end of the month.

Beef:

Wholesale boxed beef prices were mixed this week, but remain on a mostly steady path. Choice finished with a weekly average of $182.51/cwt, down $0.51, and Select finished at $180.45/cwt, up $0.90. This puts the Choice-Select spread at a very narrow $2.06/cwt.

[I have been out of town the past few days, so tables and a more in-depth analysis of the on feed report will be available Monday.]

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