Compared to last week, feeder and stocker cattle prices continued to show modest gains even though most industry members feel the market is near its peak if not top heavy. Throughout the nation, steady to 2.00 higher was a recurring trend with the exception of a few areas posting slight weakness on heavier feeders and some sales reporting stocker calves more than 2.00 higher. Handsome price levels are pulling graze-out wheat cattle off pastures a bit earlier than usual this year, with heavy auction receipts at many large volume salebarns across the Southern Plains. More sellers are moving load-lots through the auctions as they figure paying a little freight and commission is a small price to pay for increased competition. Country bids remain closely tied to the CME Board and don’t often rise above hedging levels like they often do in an auction setting. Like the graze-out yearlings; lightweight new-crop calves, culled slaughter cows and bulls, and fed steers and heifers are all being pulled ahead to take advantage of the lofty cash markets – which continues to embolden beef cattle fundamentals. Cattlemen are nervously looking (as if they were
attempting to cross a busy intersection) for which outside element that will come in and break up the party.

Several crashers are lurking (like the disastrous oil slick in the Gulf of Mexico, financial unrest in southeastern Europe, increased violence from terrorists and lawless border wars, and the seemingly routine natural disasters) any of which could derail our economic recovery or destroy our rebounding beef export demand. These events seem worlds away from grassroots cattle production, but with beef enjoying almost invincible supply/demand factors they are the issues weighing on the cattle markets. But so far; stockers and feeders continue firm on near historical highs, fed cattle are maintaining their profits and position near the century mark, and packer cow buyers keep outbidding replacement female interests – even on middle-aged high production mothers. Perhaps it’s easier to just revert back to simply fretting over the weather, which is a standby for agricultural worry warts. But this spring has been almost ideal with adequate moisture levels in most areas, the majority of pastures are rated in good to excellent condition, and corn plantings are well ahead of schedule. With the exception of the flood waters in Tennessee drowning-out the steel guitars at the Grand Ole Opry, weather concerns have been minimal so far this spring.

Feeder cattle marketing will soon taper off as we head into the long, hot summer and unlike most commodities – the extremely tight supplies tend to pressure the market as buyers struggle to fill trucks and orders. But, demand is expected to be very good for any offering that is large enough to draw a crowd as we now know just how tight beef cattle numbers are at every level. This week’s reported auction volume had 47 percent over 600 lbs and 45 percent heifers.

Source: AMS/USDA, Corbitt Wall/OIC, Greg Harrison, Baldemar Ortiz