Feeder Cattle Demand Remains Strong

The current run-up in feeder cattle futures prices to new contract highs illustrates the strong demand for the calves in the country.

Since making a swing low of $150.00 per cwt on Oct. 23, the Nov futures contract has shot up to Monday’s contract high of $160.30, surpassing the previous contract high of $158.02 set on Sep. 22.

Some technical traders might see some bearish concerns in Monday’s close since it was well off the day’s high, near the open and near the day’s low.  “It was unable to hold the gains,” they might say, “and is thus ready for a setback.”

They may be right, but fundamental support remains strong, and the 14-day relative-strength index indicates the contract is not yet overbought, although it is approaching such a condition.




After a one-week dip two weeks ago, 700- to 800-pound feeder steer prices in the Southern Plains turned higher again last week, with a weekly average of $156.91 per cwt.  This is up from $153.75 the previous week.

Last week’s average country price for those feeder cattle in the Plains also was well above the same week last year, even though there are more of them, the result of a growing US cattle herd.  Last week’s price of $156.91 per cwt was up $30.57, or 24.2%, from last year’s $126.34, although it remained $21.05, or 11.8%, below the 2011-2015 average of $177.96.

Some in the industry say those long-weaned calves are in greater demand as feeders and grazers try to get ahead of an expected seasonal increase in short-weaned or bawling calves.  So far, however, demand for lighter-weight calves also remains strong as weather conditions across traditional winter grazing areas remain mild, which would minimize extra stress on the bawlers.

USDA-Agricultural Marketing Service data show last week’s average price for 400- to 500-pound steer calf prices in the Southern Plains was $187.25 per cwt, up $3.84, or 2.09%, from $183.41 the previous week.  Last week also was up $42.40, or 29.3%, from $144.84 last year, although it was $37.33, or 16.6%, below the previous five-year average of $224.57.

Cash fed cattle prices last week made late, unexpected gains, and market analysts say it remains to be seen if the strength can hold this week and maintain support under the feeders.




No fed cattle sales were reported from the Livestock Exchange video auction Wednesday.  The previous week, light sales were reported at $109 per cwt on a live basis.

Cash cattle trading waited until late in the day on Friday after the USDA’s Quality Assessment Division, in charge of animal grading, Thursday night to fix an apparent faulty adjustment that had been made to some of the camera systems earlier in the year, Urner Barry reported.  The earlier changes had been linked to a spike in the percentage of choice and prime carcasses since summer.

Late Friday, cash trading took place at $116 to $119 with some at $119.50 per cwt on a live basis and $182 to $186 dressed.  Cattle traded last week at $110 to $112 live and $174 to $175 dressed.

The USDA’s choice cutout Monday was down $0.28 per cwt at $203.02, while select was up $1.16 at $193.64.  The choice/select spread narrowed to $9.38 from $10.82 with 77 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday was $154.93 per cwt, down $0.19.  This compares with Monday’s Nov settlement of $158.32, down $1.85.