May 28, 2004

US's Feeder Cattle Higher Last Week, Calves Move Lower

Feeder steers and heifers weighing more than 600 pounds sold unevenly steady to $2 higher across the country last week. Lighter weight stockers and calves were unevenly steady to $2 lower with mixed trends reported in the calf markets of the Southeast.

Strong signals were showing that the feeder and stocker cattle market has topped out for the time being. However, contrary to popular belief, not everything that goes up has to come down immediately; it can go sideways for a while. The word "steady" may become more prevalent on market reports as supplies remain extremely tight but trading slows down for the summer months.

A good portion of this spring's grass cattle have changed hands at least once during this bull market, but eventually these cattle will have to be turned out. Wheat farmers in the Southern Plains are greasing up their combines, and this will slow cattle trading from Texas up through Kansas over the next several weeks.

Midwestern activity is also starting to tail off as cattle farmers turn their attention to baling hay and moving bulls around, not to mention that they do not have any cattle left to sell anyway. Ranchers in the Mountain states and the Northern Plains are struggling with dry conditions and may be forced to sell off more of their brood stock.

The fed cattle market lost ground again, with the bulk of sales at $86 live and $138 dressed.

Offerings weighing more than 600 pounds made up half of the week's reported auction volume, and 44 percent were heifers.