Summer and fall fed futures contracts are sitting on support levels, while April has broken support. If markets should break support, we could see further weakness in cash fed prices as well as 600 to 800 lb. Several factors are supportive of feeder prices or at least not as negative as what has happened to fed cash, cutout values and April fed futures. Feedlots are beginning to dry out and placement interest is increasing. The decline in summer and fall fed futures has been relatively small compared to the nearby months, and it is those months that feeder buyers are using to buy feeder cattle.
Buyers can bid higher when cost of gain declines.
Feeder supplies are tighter than a year ago. Despite the large supply of grain, we have a lot of growing season ahead for corn and grass. Some decline in prices for lighter calves is typical as grass toughens. Even that decline may be less than normal this year if rainfall remains plentiful. Any significant break in distant futures would also cause a decline feeder prices.