As expected, Kansas feedlot sales to packers, called closeouts as the cattle are closed off the books for the feedlot, plummeted in October, according to data collected by the Kansas State University Extension Service and compiled and released by the Livestock Marketing Information Center in Denver.
UNUSUAL MOVES
Feedlot closeouts of fed steers were at last year’s unusual highs in August and declined in September, the LMIC said. However, Kansas feedlot closeouts last year plunged in September and declined to October’s seasonal low.
This year was just the opposite. Closeouts declined from the August high in September and dropped sharply to the October low.
The average number of fed steers marketed to beef packers in October was 3,393, the data showed. This was down 1,552, or 31.4%, from the September rate of 4,945 and only 183, or 5.70%, more than the October 2019 rate of 3,210. But it was 469 head, or 12.1%, fewer than the 2014-2018 average of 3,862.
October usually marks the seasonal low point in Kansas feed yard closeouts, although it usually is only slightly below the September marketings rate. From October’s low, average feedlot sales to packers climb to around 4,000 head, followed by a surge in December to more than 5,000 head in December.
Last year’s sales went from October’s low of 3,210 head to November’s 3,698 head to December’s 4,284 head.
FINAL WEIGHTS REMAIN HEAVY
Perhaps answering the question in many cattle feeders’ minds about why fed cattle prices can’t seem to mount a compelling rally in spite of unusually large packer profits on the meat is the larger size of the average steer sold for slaughter. Feedlot exit weights have been well above last year and the previous five-year average all year, and they remained elevated in October.
The average exit weight of fed steers from Kansas feed yards in October was 1,460 pounds, up 18, or 1.25%, from September’s 1,442 pounds and up 38, or 2.67%, from last year’s 1,422 pounds. It also was up 31 pounds, or 2.17%, from the 2014-2018 average of 1,429 pounds.
Feedlot exit weights have a strong seasonal tendency to rise in November and then to decline in December. Last year, they rose in November from October and were above the average, but then they rose a little in December.
January exit weights should be lower.
TIME ON FEED NEAR AVERAGE
The average number of days the cattle sold to packers in October declined sharply and were near last year and the previous five-year average in October. Closed out steers in October had spent an average of 160 days on feed, versus 161 last year and the 158.6-day average.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains last week at $110 to $112 per cwt on a live basis, mostly $110, steady to up $1 from the previous week. Dressed-basis trading was reported at $172 to $174 per cwt, steady to up $2.
The USDA choice cutout Monday was down $4.22 per cwt at $230.80, while select was off $8.03 at $209.48. The choice/select spread widened to $21.32 from $17.51 with 139 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.09 a bushel over the Mar CBOT futures contract, which settled at $4.24 a bushel, up 0.03.
No delivery intentions for live cattle futures were tendered Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $138.28 per cwt, down $0.90. This compares with Monday’s Jan contract settlement of $137.55 per cwt, down $2.22.