Cash fed cattle prices spiked $2-$5 per cwt higher this week, helping calves and feeder cattle at all weights to trade steady to $5 higher.
Ongoing pessimism surrounding cattle markets—a sense that the other boot is about to drop—is becoming more difficult to support in the wake of cash trade this week, as well as improving technical data.
Steers and heifers at all weight classes traded steady to $5 per cwt higher, according to the Agricultural Marketing Service (AMS). There were instances of $6-$7 higher for lightweight calves in the north central part of the country.
“Demand was good for feeder cattle and very good for grass cattle with the right condition,” AMS analysts say. “Feeder Cattle futures saw triple-digit gains throughout the week, which provided support. However, buyers continue to be very cautious on current purchases, as slaughter cattle futures for the summer months are sharply lower than the cash market.”
The CME Feeder Cattle Index closed $2.05 higher for the week at its highest level since the end of January. Feeder Cattle futures closed
an average of $3.29 higher week to week on Friday ($1.52 to $4.95 higher).
Feeder cattle prices were buoyed by reports of lower feedlot breakevens and wholesale beef values continuing at their highest levels since last summer, tied to snug harvest-ready supply and an apparent resurgence in beef demand.
Choice boxed beef cutout value was $3.60 higher week to week at $223.43 per cwt on Friday. Select was $3.49 higher at $214.48.
Negotiated cash fed cattle sales were $2-$5 higher than the previous week at mostly $128-$132 per cwt. Dressed trade was $8 higher at mostly $210. Plus, according to AMS, prices were paid for delivery on 1-14 days and 15-30 days.
Except for 92¢ and 35¢ higher at the back of the board, Live Cattle futures were an average of $1.95 higher week to week on Friday ($1.42 to $2.40 higher).
Positive news is increasing on the technical front, too. In fact, Stephen Koontz, agricultural economist at Colorado State University, says recent data suggest the price collapse of 2015-16 is done.