January Cattle Rally Continues
Gloomy weather didn’t dampen the optimism in cattle country as higher cash prices were the norm. Steer and heifer calves sold steady to $5 per cwt higher in the Plains, and notably steady to $3 lower in the Southeast. Yearling steers and heifers sold at auction steady to $3 per cwt higher.
USDA Agricultural Marketing Service reporters called demand “good to very good in many locations nationwide this week in spite of trying weather and conditions through the center part of the country.”
The trying weather conditions included an ice storm that cancelled or severely curtained auctions in the Southern and Northern Plains. “Order buyers got back in the saddle mid to late week and paid up with higher prices in a vast majority of auctions.”
But the week’s strongest gains were made in the fed cattle trade. Wednesday’s Fed Cattle Exchange online auction set the tone with sales of $120 to 121 per cwt, and a top of $121.25. Thursday’s direct trade saw feedyards turning away bids of $120 only to have packers come back with bids of $122 to $123 per cwt where the bulk of trade to place. On the week, fed cattle were called $3 to $4 per cwt higher. Since thanksgiving, the cash fed cattle market has climbed $15 per cwt, which amounts to more than $200 on a 1,400-pound steer. This week’s dressed trade occurred at $194 to $196, which was $4 to $6 higher compared to last week.
Retail prices released this week saw the USDA all-fresh retail price in December at $5.445 per lb., down $0.13 from November.
Pro Farmer analysts note the “weakness in wholesale prices raises the risk a near-term cash high has been posted, as retail buying has eased as it normally does at midmonth. In addition, the market is due for a correction as it moved into an overbought condition this week, according to the nine-day Relative Strength Index. However, transportation disruptions prompted by storms could force temporary shortages that could give the market short-term boosts.
Over the next 30 days, Pro Farmer analysts expect “prices to move higher seasonally as weights ease and retailer interest rises at the beginning of February. Weights have slipped seasonally due to winter weather, which is supportive. A boost in prices is likely following a short-term correction from an overbought condition as the fall/winter uptrend in prices is still in place.”
