November 5, 2007

Heavy receipts, selective buyers for US feeder cattle

A very light test of yearling feeder cattle sold 1.00-3.00 lower as buyers last week adjusted price levels to match lower cattle futures and the weak finished cattle trade in the Chicago Mercantile Exchange (CME). 

Calf sales are the main attraction across the country and this past week's price trends were very uneven, ranging from 5.00 lower to 5.00 higher. Lower markets far outweighed those that gained in price level and a pattern to the unevenness was evident as to location. The Southeast calf markets (including south and east Texas) predominantly traded steady to 3.00 lower with instances as much as 5.00 lower. Direct trading was very light in the Plains and Midwest but receipts were heavy in salebarns with many sharing the similar trend from unevenly steady to as much as 5.00 lower - although several locations in the central US sold calves from firm to 5.00 higher, including major markets in Oklahoma, Colorado, and Wyoming. One consistency that remained this week in the calf market is that buyers continue to be more selective for health, quality, lot size, and their preference for steers. 

The current calf trade is a good reason for cow/calf producers to narrow their calving window, wean at least 30 days, castrate, and participate in a structured health program that can be verified. Demand from wheat grazers is hardly noticeable this year as the surge for the price of the crop has significantly lowered the acres that will be grazed, plus the recent dry spell across the Southern Plains has growth behind schedule with many fields yet to be sowed. Corn and soy harvest continues to delay Midwestern farmer feeder interest in calves, but conditions were ideal this past week for harvesting and huge strides were made. Temperatures have been very mild in most areas but cool fronts are beginning to pass with more regularity and first frosts have occurred with many more expected next week. Hard frosts might stop grass growth but they also limit the number of flies and airborne illnesses that affect calves. This could cause calf outlets to broaden as buyers are less fearful of a health crisis, even in commercial feedlots as the availability of leftover yearlings dwindles. The direct feedlot trade in Texas and Kansas was mostly steady on Friday (November 2) at 93.00. Nebraska feedlots sold steady to 1.00 lower with live sales from 91.00-92.00 and dressed sales at mostly 142.00. Last week's reported auction volume had 32 percent over 600 pounds and 41 percent heifers.