Feeder and stocker cattle traded steady to 5.00 higher this past week with surprising support from the CME cattle futures.  Weather conditions affected trade again this week with snow and ice stretching from south Texas across much of the Southeast and throughout the mid-Atlantic regions.  These areas are exhausted from a winter that has tormented repeatedly but much of the Midwest and Northern Plains has largely reached mid-March unscathed.  Now, the entire country is excited to see forecasts for above average temperatures and sunshine that will undoubtedly improve consumer beef demand.  Folks will be venturing out of their caves and much more frequently be dining on beef and throwing their favorite cuts on the backyard grill, especially in the heavily populated areas of the Northeast.  This should force packers to become more competitive for the extremely tight numbers of market-ready fed cattle that are not already spoken for.

Warmer temperatures will also spark the resurrection of green grass and the peak of demand for stocker cattle to graze spring pastures.  The only place to find sizeable numbers of lightweight cattle this time of year is in the Southeast, where marketing of these calves is at least three weeks behind.  However, muddy conditions from melting precipitation will likely keep receipts from fully recovering immediately.  Expect 300-600 lb calf prices to reach their highest levels of the year over the next few weeks as demand will still far outweigh the backed-up supplies.  Western orders for stocker calves will be much more intent on securing headcounts, rather than price or quality levels.  Although few summer backgrounders hold much faith for continued support from the futures market, this past week’s resurgence of the out front CME Feeder Cattle contracts should still lend enough confidence to push the envelope for stocker calves.

This week’s improved demand for feedlot replacements was not as seasonally clear, other than farmer-feeders want to get their cattle investment secured before planting season and commercial feeders want to lock-in their input expenses before any wet spring planting delays cause the corn market to jump out of its sideways trading range.  A uniform load of black-hided 817 lb steers at the historic St. Joseph, MO Stockyards brought 211.75 on Wednesday.  Even though cattlemen have given up on the likelihood of feeder prices challenging the record levels of 2014, benchmark steer classes of 800 lbs and 500 lbs are still holding either side of 200.00 and 300.00 respectively.  Profits from recent rounds of growing cattle purchases are still the main driver of feeder markets and this is not likely to change until bold buying results in significant loss.

July 2, 2015 has been slated for the final day of “pit” trading of agricultural commodities in Chicago.  The ramifications of this modernization is unclear, other than there will be an overabundance of high-strung math whizzes hitting the job market in the local area.  Significant changes to markets are not expected, since electronic trading has been handling an overwhelming percentage of the trades in recent years.  The speed of technology eventually phases out the chance for human error in such entities.  Similarly, automated reporting of cash cattle auction sales (like Cattle Market Central) are destined to replace on-site government market reporters.  The volume of data that can be handled by automated systems is virtually endless in a process that is much more efficient and cost effective.

Source:  Corbitt Wall, DV Auction