Cattle Rally Gains Steam Into Third Week

Producers are gaining market leverage. ( CAB )

Cash fed cattle prices traded higher in all regions for the third consecutive week, marking a 16% gain since the lows were set in September.

Cattle traded in Iowa and Nebraska from $115 to live and $182 dressed, steady to $2 higher. Trade in the south was $115 to $116, steady to $2 higher.

December live cattle closed up $0.025 on Friday at $119.10. February live cattle ended the day up a nickel at $124.975. For the week, February cattle lost a nickel. January feeder cattle futures closed up $0.225 today at $144.275 and for the week lost $1.60. February live cattle futures prices late this week saw a normal corrective pullback and pause in a solid uptrend on the daily chart. Analysts say to look for more price strength next week in this technically bullish market. Part of the late-week pullback was likely because December live cattle futures are still about $3 above this week’s cash action.

Compared to last week, steers and heifers sold steady to $3 higher at auction, AMS reporters said.

“The fall calf run has arrived and in a big way. Last week, yearlings were sprinkled in the heavy runs seen nationwide with this being the second week in a row with cattle over 600 lbs coming in at only 37% of the week’s auction receipts,” AMS said. “All auction receipts were somewhat tempered with early week sales dealing with severely cold temps and frozen precipitation making travel hazardous from Missouri up through the Northern Plains and into the Upper Midwest.”

Some sales saw lighter numbers of buyers with large runs across the country. Health of calves has been a concern and AMS reports some Nebraska Sandhills ranchers couldn’t get calves vaccinated ahead of sale day due to wet pasture conditions.

For the week, the Choice cutout closed $1.68 higher at 240.80, while Select was $1.07 higher at $214.33; putting the Choice-Select spread at $26.47.  Cattle Slaughter under federal inspection estimated at 657,000 for the week, 6,000 more than last week and 9,000 more than a year ago.

Total cattle slaughter for the year is slightly more than a year ago. Heifer slaughter is more than 7% higher while steer slaughter is near 3% below last year. Year-to-date cow slaughter is near 3% higher.

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