By Joanna Levin
LOWER corn prices, which make it cheaper to add weight to cattle in the feedlots, have prevented United States cattle returns falling further – at least for the time being. Futures contracts in Chicago yesterday (Monday) closed at 75.625¢/lb (45.2p/lb) for the month of May, down 1.3¢ on the week.
Feeder cattle prices at auctions were generally unchanged to 1¢/lb lower. Beef prices are expected to rise due to the approaching Memorial Day weekend at the end of May and rising seasonal demand.
Early last week, packers were bidding for slaughter cattle at 64¢/lb against sellers offers of 67¢/lb. By Friday, the stand-off had ended. Owners were closing sales at 64¢/lb, down from 65-66¢/lb the week before. Packers and feeders are both suffering from a lack of profit margins and this is encouraging owners to hang on to their cattle in the feedlots.
Meanwhile, new placements into feedlots are estimated to be down by 10% from six months ago. But over the next few weeks, cattle entering feedlots are expected to include a historically large proportion of heavy animals weighing more than 700lbs. This is due to the high number of heavy cattle coming off winter wheat fields and ryegrass.