Market reports for November 6, 2015
Compared to last week, the bulk of the feeder supply as we start November is now made up of calves, which again this week sold very uneven with the best demand noted for lightweight calves to turn out on wheat pasture. Native calves in and around Oklahoma traded mostly steady to 5.00-10.00 higher early in the week. With Southeastern markets, the Midwest and Northern Plains all trading very uneven as lightweight calves under 500 pounds sold in many areas steady to 5.00 higher instances 10.00 higher early in the week, but turning lower as cattle futures and feeder prices declined from mid-week on in many areas 10.00-15.00 lower, instances 20.00 lower. Yearlings on light supplies sold steady to 5.00 lower early in the week, then turning 10.00-15.00 lower from mid-week on. Many of the major production areas saw calf price trends hinge directly on the observation of the buyers at hand and the huge drop in the cattle futures. Across the Northern Plains and Midwest pre-conditioned calves still remain the calves of choice, but it still is about how they struck the buyers eyes – as far as hair-coat, attitude, and mannerisms in search of calves that spend more time eating than bawling and the ability to stay healthy. This time of year, feedlots and growing yards are full of new arrivals with some getting sick for the first time and others starting to break as their initial mass treatment of anti-biotic wears off. Sticking to reputation lots and consignments that have performed well in prior years has always been a good rule of thumb when buying calves late in the fall. Cattle futures continue their volatile swing attempting to gauge how much more if any upside potential remains going into the holiday season. Futures collapsed on Wednesday with limit down moves on Live and Feeder cattle contracts as the market remains elusive. Anxiety and bearishness continued into Thursday as heavy losses continued to grow with strong-armed haste with losses of over 4.00 in Feeder Cattle contracts and sharp triple digit losses in Live Cattle contracts. Caution seems to be in order with uncertainty and volatility entering back into the cattle futures and cash prices. Fed cattle prices the last couple of weeks have pretty much held the line at 138.00-138.50, before Wednesday’s and Thursday’s meltdown which will definitely upset market behavior. Thursday in Nebraska light to moderate trade occurred with dressed sales 4.00-6.00 lower from 205.00-206.00. Friday on light trade in the Southern Plains live sales ranged from 132.00-134.00, mostly 4.00-6.00 lower with a few live sales in Nebraska at 135.00. Boxed-beef values started the week feeling pressure to see if higher values could be a challenge before finding some footing on Wednesday. Footing slipped on Thursday and Friday as Choice cut-out scrambled to get a foot hold closing 3.20 lower on Friday at 215.66 compared to last Friday’s close at 220.04. We are getting ready to enter the time of year when white meat and ham dominates sales and retail features. The Restaurant Performance Index was released on October 30th showing same-store sales and customer traffic remained positive in September, but the RPI did register a modest decline. The RPI stood at 101.4, down 0.1 percent from August. August represented the 31st consecutive month in which the RPI stood above 100. With food service a key driver in beef demand, going forward it will be important to keep levels above 100. Harvest is winding down with corn harvest at 85 percent complete and soybeans at 92 percent harvested. Auction volume included 38 percent weighing over 600 pounds and 38 percent heifers.
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I want to address a couple of issues in this week’s editor’s note.