The annual peak for slaughter steer prices may have just passed, according to USDA/Agricultural Marketing Service data.
If the peak isn’t in already, it should come about the last week of April or the first week of May, the data show. But even then, it likely won’t be much higher than the most recent weekly Southern Plains high of $128 per cwt, set two weeks ago.
Since this year’s weekly average fed cattle prices are following last year more closely than the 2013-2017 average, it might be concluded that the annual high is already in. Last year, the high came on the second week of February at $129.95 per cwt.
IT’S NOT ALL DOWNHILL
But to say that it’s all downhill from here for fed cattle prices would be a stretch, too. On average, fed cattle prices move unevenly lower into the last week of September before catching support from stronger end-of-the-year beef demand and a seasonal decline in steer and heifer slaughter.
It’s apparent, too, that futures traders are looking at the seasonals and figuring that fed cattle prices now are set to decline into September. Closing futures prices Tuesday for delivery months through August all are lower than the preceding delivery month.
Beginning with the Oct live cattle futures contract, prices begin to rise through Apr of next year before falling off again in the Jun and Aug months.
That has been the case since the nearby Apr contract high a high of $130.45 per cwt on March 21. A subsequent downturn took prices to a double bottom of $125.62 per cwt on Friday and Monday. These are lows not seen since Jan. 23 when the Apr low was $125.47 per cwt.
OPTIMISM ABOUNDS
But what would the cattle market be without optimism? There does appear to be some optimism in the feeder cattle market as weekly average prices have inched their way higher since bottoming the third week of January in the Southern Plains at $138.61 per cwt.
As with fed cattle, prices for 700- to 800-pound feeder steers in the Southern Plains are following last year more closely than the 2013-2017 average. While they have been below last year most of the time, they still are closer to 2018 weekly prices than to the previous five-year average.
If the trend continues, feeder cattle prices likely will struggle near or below last week’s average price of $145.77 per cwt until about the second week of May. From there, the seasonal tendency is for feeder cattle prices to rise during the summer as more calves spend more time on pastures.
That all ends around the first week of October as pastures wither and calves are sold.
CATTLE, BEEF RECAP
Light cash cattle trading was reported at $124 per cwt on a live basis, down $1 to $2 from last week. Dressed-basis sales last week were at $206 to $208, steady to up $1.
The USDA choice cutout Tuesday was down $1.11 per cwt at $225.73, while select was down $0.84 at $218.49. The choice/select spread narrowed to $7.24 from $7.51 with 122 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $142.50 per cwt, up $0.08. This compares with Tuesday’s Apr contract settlement of $144.85, down $0.60.