Currentness in fed-cattle marketing and tight supply fundamentals continue helping cattle prices weather the broader global economic storm.

Consider Friday.

Major financial indices plunged – the Dow Jones Average nose-dived 300 points, closing at its lowest level since February. All that was supposedly due to ongoing investor skittishness over finances in the European Union and a monthly jobs report that failed to impress traders.

The euro plummeted to a four-year low. The value of the dollar (ICE-DX) climbed past 88 – long unfamiliar territory. Yet, feeder-cattle futures closed the week a touch higher than the previous Friday. Fed cattle had traded $1-$1.50 higher during the week. A heavy run of feeder cattle sold $2-$5 higher and as much as $8-$9 higher at Ft. Pierre Livestock Auction Friday.

Obviously, cattle prices are suffering compared to what they would be without the negative outside markets. Outside markets helped sink live-cattle futures to another triple-digit loss Friday as long positions ran for the exits. Wholesale prices took another dip with Choice boxed beef down $1.47 and Select down $1.74.

But there continues to be plenty of promise in the cattle markets, helped along by the extraordinarily current state of fed-cattle marketing.

“Producers have pulled cattle forward to meet impressive price levels and the feeder cattle well has run dry,” say Agricultural Marketing Service analysts. “Money could bring these cattle back out of the bushes, but it will likely take a market that's at least as lofty as early May; otherwise, sellers will just hold on to the cattle until late summer and take advantage of cheap pasture gains.”
Earlier in the week, Darrell Mark, University of Nebraska ag economist, pointed out that the strong basis in recent weeks has encouraged cattle feeders to remain current on marketing.

“For May marketings that were hedged earlier in the year, cattle feeders had an opportunity to sell those May cattle at cash prices that were higher than expected relative to the futures market, thus resulting in a higher than expected net sales price,” says Mark in last week’s In the Cattle Markets. “Marketings as a percentage of the cattle-on-feed inventory have been over 17% this spring, and the number of cattle on feed for more than 120 days dropped 8.8% on May 1 relative to a year ago.

"Because cattle were marketed so timely, the lower carcass weights observed since winter have generally remained. Currently, steer weights are 13 lbs. lighter than last year, and have been as much as 25 lbs. lighter than 2009. While dressed weights reached their seasonal low a couple weeks ago and have begun to increase modestly, lighter weights continue to be supportive to fed cattle prices,” he says.

Fed cattle sold $1.00-$1.50 higher last week ($94-$95.50 live). Feeder cattle and calves sold unevenly steady to $2 higher on the week at auction. Direct trade feeders trended weak to $2 lower, pressured by the futures market.

The summary below reflects the week ended June 4 for Medium and Large 1 – 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
TX 19,800 $110.96 $111.99 $100.84 $105.96 $102.42 $98.85
OK 16,800 $119.46 $113.15 $111.87 $111.71 $109.60 $104.87
MO 12,800 $127.73 $118.91 $112.75 $114.74 $109.57 $102.09
SD 11,300 $129.702 $122.804 $118.09 ** $114.89 $109.05
AL 8,800 $111.86 $106.01 ** $103.72 $98.63 $94.764
KY* 6,000 $118.82 $110.32 $101.29 $105.52 $102.31 $101.78
GA*(***) 5,800 $101-115 $93-115 $88-94 $93-109 $86-102 $90-92
Carolinas 4,800 $104-125 $104-119 $95-107 $91-111 $85-104 $85-94
AR 4,600 $119.14 $115.76 $111.634 $109.06 $103.26 $100.394
MS* 4,500 $103-1141 $100-1123 $93-1015 $95-1051 $90-1003 $84-925
NE 4,300 $126.45 $125.212 $113.216 $120.32 $111.95 $106.64
NM 4,200 $123.31 $115.39 $101.027 $95.02 $92.54 $100.474
LA* 4,100 $102-114 $103-108 $102-1084 $93-107 $97-103 $98-1004
TN* 3,300 $113.71 $108.71 $105.22 $105.59 $98.56 $90.71
KS 3,200 $134.421 $119.31 $100.474 $116.712 $109.80 $107.77
FL* 2,900 $100-122 $98-109 $93-964 $94-109 $90-103 $88-101
WY 2,300 ** ** ** $120.59 ** **
VA 1,100 $115.032 $109.95 ** $105.462 $98.064 **

* Plus #2
** None reported of the same quality at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.
8850-900 lbs.