I apologize for my recent sporadic posting. Hopefully things have slowed down enough to catch my breath. If you have any questions, comments, or suggestions let me know.
Cash trade slowed this week on the heels of strong prices last week. Packers are assumed to be working off contracts for this week’s slaughter and staying on the sidelines for the time being in the cash market. In the Central and Southern Plains (Kansas and south) the volume of trade was light but called at $127/cwt on a live basis. In Nebraska live and dressed cattle were lower at $126-$127/cwt and $201/cwt, respectively. In the rest of the Western Cornbelt, trade was light at $124-$125/cwt on a live basis and $200/cwt for dressed cattle. Collectively, the five-area live price finished the week at $126.51, down $1.21 versus last week. Slaughter weights appear to be taking a hit from the recent blast of winter weather. Dressed weights are down about four to five pounds from weights seen just two weeks ago.
Feeder steers were $2-$4/cwt lower and feeder heifers were $1-$3/cwt lower in Oklahoma City, while calves were too lightly tested to call a trend. In Mississippi auction markets feeder steers and heifers were steady. Cull cows were $2/cwt higher and bulls sold $1/cwt higher.
Live cattle futures were lower this week. Carry-over from last week was seen early in the week. A surge in cash prices helped buoy prices to close out last week and many expected the trend to continue. However, cash trade did not develop for the most part and by mid-week concern was mounting. This became more evident as the week ended with Thursday and Friday providing the major blow to prices. Those with long (a.k.a. “bought”) positions started selling to exit those positions which pushed prices lower. A bright spot has been exports, which are currently 3.8% ahead of 2012’s pace. The beef market most likely will not eclipse the record pace set in 2011, but given the short supplies exports have been rather resilient thus far in 2013. Feeder futures had a similar week, breaking with live cattle briefly in the middle of the week as soybeans were under pressure.
Corn futures were higher this week as the market rallied on last week’s supply/demand report, which revealed total domestic corn use higher by 100 million bushels stemming from the feeding industry (higher imports and lower exports left the amount expected to be carried over unchanged at 632 million bushels).
Wholesale boxed beef prices continue to march higher. Choice finished with a weekly average of $196.75/cwt, up $1.73, and Select finished at $195.27/cwt, up $2.39, and leaving the Choice-Select spread at a very narrow $1.47/cwt. The current value of Select boxed beef sets a new (non-inflation adjusted) record previously set in early March of last year. Both Choice and Select are up approximately $15/cwt over the past three to four weeks.