Market gives back prior gains
Market (from page 1)
in the equity markets. The erosion in the futures markets last week was largely a result of that same steep downturn in equities, said Livestock Marketing Information Center Director Jim Robb. “People are watching the futures and panicking a little. Right now, they’re watching the stock market and nothing else,” he said, pointing out the disconnect between the futures market and the industry fundamentals which remain quite strong as a result of the tight supply conditions that exist in the country.
Robb acknowledged that there is some reason to be concerned about export markets, but he believes those concerns are being overdone.
“If you look at the export numbers that came out this morning (Nov. 20), they show that, yes, exports are down from six weeks ago, but they haven’t gone to zero as some people are claiming,” he said. “Weekly exports figures are down about 30 percent from six weeks ago, so there is some reason for uncertainty, but I think it is being overdone this week.” Robb pointed out that the domestic market has added some support to the beef markets as buyers step in to the market to book their holiday beef needs.
Going forward into 2009, Robb said he expects the fed cattle market will step forward to lead prices before calf prices begin to increase substantially.
“The markets are down this week, but I wouldn’t be surprised to see Friday trade at the $90 level and next week, we could go up from there,” he noted, saying the fundamentals are in place for a move upward.
“Fed cattle marketings are going to be down, but not for any reason other than the fact that there just isn’t as much fed cattle supply as there was last year,” Robb pointed out. He said the market is currently building a support level that could provide a strong bottom for the market into next year. Feeder cattle Buyers worried about cattle and grain futures, along with the greater economic woes, have kept the
damper on the feeder cattle market recently as last week’s market continued to see stinging losses. Along with the weakened demand for feeder cattle come the largest runs of the fall. Despite tight feeder numbers, the lackluster demand and heavy offerings have coupled to create sharply lower markets the past couple of weeks. In addition, a number of potential sellers held this year’s calf crop back from town to assess the market before jumping in. “We are officially in the meat of the calf run which has come a few weeks later this year due to an early snow storm, the late corn and soybean harvest, and sellers holding cattle through the financial crisis and election-year dust storm,” said USDA Market Reporter Corbitt Wall. “This is the first week since late August that nationwide reported auction receipts were heavier than year-ago weekly totals and in that time, sale barn marketings have been 16.3 percent lighter than 2007.” Wall pointed out that the heavy runs will likely continue to overwhelm demand for cattle, though a change in the involvement of some buyers could help perk up the market.
“There is definitely some catching up to do which could be more calves than the available outlets can swallow, but many areas reported the arrival of new buying interests this week that have been sitting on the sidelines so far this fall.” There were 15,491 receipts reported last week at the Oklahoma National Stockyards in Oklahoma City, OK, where feeder cattle were $3-5 lower. Steer calves dropped $3-5 lower with five-weight long-weaned calves at the least decline.
Heifer calves were $4-8 lower. Demand was moderate on better kinds, and light for unweaned calves and lower grading cattle. Buyers were not aggressive for numbers, but most were still in the barn well into the evening.
Steers weighing 678 lbs. sold at $96.69, while 662 lb. heifers brought $89.60. The Joplin Regional Stockyards near Joplin, MO, reported receipts of 7,400 head last week where steer calves and yearling steers were $2- 5 lower. The exception was steer calves under 425 lbs. which were $2 lower. Heifer calves under 500 lbs. moved
$8-12 lower, with heifers over 500 lbs. $4-6 lower. Demand was moderate to light, and supply moderate.
Last week’s sale at the Winter Livestock Feeder Cattle Auction in Dodge City, KS, saw 3,912 head offered for sale where 350-550 lb. steers were steady, with weights of 550-700 lbs. weak to $2 lower. Steers weighing 700-900 lbs. dropped $6-9 lower, with the full decline on steers carrying extra flesh. Heifers from 350-500 lbs. were steady, while 500- 900 lb. heifers dropped $4-7 lower with the full decline coming on heifers carrying excessive flesh. Steer calves weighing 657 lbs. sold for $93, while 680 lb. heifer calves sold at $85. There were 2,800 available for sale last week at the Bassett Livestock Auction Bassett, NE, where 400-550 lb. steer and heifer calves trended $5-8 lower, with 550-650 weights trading $2-4 lower. Buyer turnout was light, and bidding was very apprehensive. Despite current market concerns, the cattle quality was top-shelf, with many bargains to take advantage of. Steer calves weighing 660 lbs. sold for $100.20, while heifer calves weighing 680 lbs. sold for $85. The La Junta Livestock Commission Company in La Junta, CO, reported receipts of 6,564 head last week where steer calves under 500 lbs. dropped $3-5 lower, with weights over 500 lbs. going $5-8 lower.
Heifer calves under 400 lbs. sold $3 lower, with weights over 400 lbs. $5-8 lower with instances of $10 lower on 500-600 lb. yearling feeder steers. Yearling feeder heifers were lightly tested.
Steer calves weighing an average of 673 lbs. sold for $87.23, while 657 lb. heifer calves sold at $79.40. Receipts of 6,240 head were reported last week at the Miles City Livestock Commission Co. in Miles City, MT, where steer calves under 550 lbs. sold $1-2 lower. Weights over 550 lbs. sold $3-5 lower, with the full decline coming in the latter part of the day. Heifer calves sold $3-5 lower, with instances of $5-6 lower. Yearling steers and heifers were too lightly tested to report an accurate trend. Steer calves weighing an average of 666 lbs. sold at $91.43, while 652 lb. heifer calves brought $87.50. — WLJ