Yearling cattle ran into some price resistance for the first time since May as volume dwindles and calves comprise most of the offering. Calves traded uneven with advances primarily on Southeastern calves headed for wheat pasture country, as well as native Oklahoma calves.
Calf and feeder prices continued their counter-seasonal glide this week, but yearling prices edged lower this week for the first time since May.
“Tight supplies of true yearling feeders continued mostly steady but there was some weakness noted mid-to-late week,” say analysts with the Agricultural Marketing Service (AMS). “The bulk of the feeder supply is now fully made up of calves which sold very uneven this past week with the best demand noted for stocker calves to turn out on wheat pasture. Southeastern calves headed for the Southern Plains traded steady to $5 higher, while native calves in and around Oklahoma were $1-$3 higher as turn-out dates are upon us for most rented pastures.”
Cash fed cattle lost some luster this week, too, selling $1-$2 lower at mostly $131-$132/cwt. on a live basis.
“Fed cattle prices the previous two weeks traded about 11% higher than the summer low,” says Andrew P. Griffith, University of Tennessee agricultural economist, in his weekly comments. “This 11% increase from summer low to fall high is similar to increases experienced in fed cattle prices the past several years which may be an indication that it will be difficult for fed cattle to push higher.”
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John Otte, Penton market analyst, noted earlier this week that boxed beef prices are not high enough to sustain the recent record prices for cash fed cattle.
Week-to-week, Choice boxed beef cutout values declined $1.81/cwt. to $202.79/cwt. while Select increased 60¢/cwt. to $189.74, dragging the Choice-Select spread $2.40 lower to $13.06/cwt.
“After a couple of really strong weeks by both the Choice and Select beef cutouts, price gains have slowed and even retracted some for Choice beef,” Griffith explains. “The Choice cutout found resistance this week around the $205 mark. Beef prices generally do not peak this early as many restaurants and retailers have not got in the full swing of purchasing beef for the holiday season. However, if this week is any indication, it may be difficult for Choice beef to push past the $205 price point. Part of the struggle may be due to the fact that a higher percentage of beef is grading Choice compared to a year ago … This same reasoning can be applied to the narrowing of the Choice-Select spread that is generally widening this time of year.”
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