Call the Market

Between the riveting prices seen June 10-11 at Superior's Corn Belt Classic video sale -- to the astonishing $1 to $5 gained in that same week's cash cattle market -- there were ample reasons for cattlemen to be excited about the year ahead as buyer demand continues to push both the fed cattle and feeder cattle markets to new highs.

The week of June 10-14 was especially important to cow-calf producers, however, as historically, the Corn Belt Classic has set the market's tone for feeder cattle prices in the fall. And while producers hope that the market continues to see strong buyer interest and that prices would potentially creep higher, one never knows how the market will trade until the cattle are in the ring, the gavel tapped and the auctioneer yells, "SOLD!"

Producers were pleased, to say the least, with the June 10-11 sale averages. At the Corn Belt Classic, Region 2 steers (which include Montana, Wyoming, North Dakota, South Dakota, Nebraska Colorado and Utah) saw steers weighing 500 to 749 pounds trade $17-$35/hundredweight more than in 2023. This is quite impressive, given that last year at the Corn Belt sale, the steer prices in Region 2 averaged $59-$76/cwt more than prices in 2022. This means that over the last two years, steer prices on the Corn Belt Classic have gained anywhere from $66-$101/cwt -- and if that isn't true price discovery, I don't know what is!

And given what the CME feeder cattle index did the week of June 10-14, I don't believe that week's market performance on the Corn Belt Classic was a one-hit wonder and that other sales aren't going to be able to see the same prices achieved. On June 14, the CME feeder cattle index closed at $256.13, another new record-breaking price for the index, which had previously made a new high just last September at $254. But given how thin supplies are of feeders and calves this year, feedlot managers know that if they're going to keep their pens full, they're going to have to pay up this year for the calves they desire -- even if that means taking on some risk.

The other interesting note I'd like to highlight about Superior's recent sale was that delivery terms were a bigger factor this year than in years past. Buyers were far more cognizant of the selling ranch's location as freight costs continue to be a costly, burdensome factor when buying cattle. Buyers were also keenly aware of each lot's shipping terms, as bigger slides and weight stops are a factor worthy of consideration when feeder cattle prices are trading at new all-time recording-breaking prices.

I'm excited to see what feeder cattle prices do through the rest of the year as the market's limited supply of feeder cattle continues to push prices to new highs. It's truly a wild, unprecedented time to be in the cattle market, and I wish you all the best in marketing your feeder cattle this year. I encourage you to know your breakeven and realize that these types of markets do come with risk and volatility.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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