Unless unexpected external market pressure develops, Oklahoma cattle prices are expected to finish the year strong, and the 2022 peaks possibly recorded before the end of the year, said Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel.
Commenting in a letter to Extension agents called Cow-Calf Corner, Peel said, in the 14 weeks from mid-July to mid-October, the volume of feeder cattle in Oklahoma’s combined weekly cattle auction summary was up 19.7% year over year, an increase of more than 66,000 head.
As he expected, larger summer volumes resulted in smaller volumes for the fall, with feeder sale volumes the last two weeks of October down 6.1%, he said. Volumes were expected to remain smaller through November.
COUNTER-SEASONAL PRICE MOVE
Oklahoma feeder cattle prices increased counter-seasonally through the summer to August peaks nearly equal to the spring seasonal highs before dropping through September into early October, Peel said. A sharp decrease in feeder futures over the period was the major factor.
In late October, feeder futures prices and cash auction prices moved higher, he said.
For the week ended Oct. 28, the combined auction price of 480-pound, M/L, No. 1 steers was $190.08 per cwt, or $912.38 a head, and the price of 781-pound steers was $176.20 per cwt, or $1,376.12 a head, Peel said. This was an increase of $463.74 a head and a $1.56-per-pound value gain for 301 pounds of gain.
The value of gain is even higher given feeder futures prices for spring, he said. Mar feeder futures imply a price of $183 per cwt for the 780-pound steer and a value of gain $1.71 a pound for the 480-pound steer purchased in late October.
COW VOLUMES UP
The volume of cull cows in Oklahoma auctions continued to run well above last year by mid-October, he said. Volumes of cull cows and bulls in auctions averaged double the level of one year ago since mid-July and has been higher nearly every week of the year.
That increase added roughly 50,000 head of cull cows above year ago levels in the seven federally reported Oklahoma auctions, Peel said. Other cull cows are marketed through smaller auctions and directly to cow packers, contributing to the national total of beef cow slaughter being up nearly 13% for the year through mid-October.
Cull cow prices dropped about 25% from late August to mid-October, he said. Average-dressing breaker cows were priced at $71.99 per cwt; boning cows at $67.26 and lean cows at $60.82.
Market fundamentals generally are bullish for cattle markets going forward, Peel said. Higher futures prices, stronger boxed beef and fed cattle prices all are supportive for feeder cattle markets.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $152.76 to $153.77 per cwt, compared with last week’s range of $150.00 to $154.40. FOB dressed steers, and heifers went for $236.63 to $239.43 per cwt, versus $233.15 to $242.13.
The USDA choice cutout Tuesday was up $0.39 per cwt at $264.94 while select was up $0.13 at $236.05. The choice/select spread widened to $28.89 from $28.63 with 118 loads of fabricated product and 34 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $2.15 to $2.25 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.67 1/2, down 8 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $176.59 per cwt down $0.32. This compares with Tuesday’s Nov contract settlement of $178.27, up $0.05.