Yesterday’s weekly Fed Cattle Exchange auction served as one more indicator that negotiated cash fed cattle prices should be higher this week. There were 3,220 head offered. Only two lots (499 head) sold from Nebraska: steers (1-9 day delivery) for a weighted average price of $122/cwt.; heifers (1-17 day delivery) for a weighted average price of $120. The steer price was even with the top reported country price in the region last week.
Cattle futures continued to grind higher Wednesday with renewed optimism.
Live Cattle futures closed an average of 62¢ higher (37¢ to 92¢).
Other than 2¢ higher in spot Apr, Feeder Cattle futures closed an average of 81¢ higher.
Choice boxed beef cutout value was 49¢ lower Wednesday afternoon at $211.64/cwt. Select was $1.01 lower at $198.57.
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Major U.S. financial indices closed narrowly mixed on Wednesday, amid mostly positive quarterly earnings reports and despite a surge in crude oil prices.
The Dow Jones Industrial Average closed 38 points lower. The S&P 500 closed 2 points higher. The NASDAQ closed 14 points higher.
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When the monthly Cattle on Feed report comes out on Friday, most analysts expect to see placements lower year over year for the first time in 12 months. Reasoning includes earlier placements of last year’s spring calf crop thus far and declining economic incentive for feedlots.
“March Placements are expected to be 12.2% lower than last year at 1.859 million head,” say analysts with Allendale, Inc.“This would be the smallest March placement in three years…Cattle feeding margins is the main reason for the decline. Finished cattle in March were seeing a $122 breakeven, still profitable. The concern comes with April, May, and June, where breakevens increase to the $126-$129 region due to those heavy fall feeder purchases.”
Similarly, according to the Daily Livestock Report, analysts surveyed by Urner Barry expect March placements to be 9.1% less than last year.
Allendale projects March marketings at 5% less than last year. Analysts responding to the Urner Barry survey expect, on average, 4% less.
Combined, Allendale estimates Apr. 1 cattle on feed to be 7.1% more than last year. Analysts in the Urner Barry survey expect 7.6% more.