Market Reports
Market analysts see signs that feedyards have significantly reduced the COVID-19-induced backlog of cattle and are regaining currentness, also a key factor in the recent market rally.
On-feed numbers indicate that packers could be running low on committed cattle, which should force some packers back into the cash market in the coming weeks.
Cattle feeders were left on the sidelines as every other cattle/beef market segment saw a price rally. Futures markets set new highs, but cash cattle have not reached $112 for seven months.
Jan. fed cattle prices are normally choppy and we’re seeing that pattern in 2021. A primary difference, compared to 2020, is that last week’s average price is $14/cwt. lower, the same discount as the 5-year average.
Driven by higher estimates for pork, the China total meat import forecasts were revised up for both 2020 and 2021, according to the USDA Livestock and Poultry World Markets and Trade report.
Cattle feeders found higher prices as 2020 came to a close, but their ability to push the market higher may hinge on how Live Cattle futures perform in the first weeks of the New Year.
Cattle feeders gained enough leverage to push negotiated cash cattle prices higher during both holiday weeks as 2020 drew to a close. Supplies of fed cattle will tick lower during the first quarter of 2021.
Cash cattle in the South traded steady, and futures contracts had a decent week but packer needs during the holidays seem to have more of an effect than the futures market.
Fed cattle treaded steady in the South to weaker in the North, with wholesale beef prices posting additional declines for the week. Friday’s cattle on feed report was as advertised and will be viewed as neutral.
Placements in feedlots during November totaled 1.91 million head, 9 percent below 2019. Net placements were 1.85 million head.
Cash cattle trade began on Tuesday last week, but bids were scarce even at lower money. Some feeders held strong for higher money, but with the decline in the CME board a higher market never surfaced.
Cattle markets limped through a lackluster week for cash sales as wholesale beef prices plummeted. Despite lower cash cattle prices, packer margins likely declined significantly with lower cutout values.
Negotiated cash cattle traded started at higher money mid-week, but in their rush to move cattle some feeders agreed to lower prices and the week ended on a softer note.
The post-Thanksgiving negotiated trade was mixed, with higher prices mid-week, falling off $1 to $2 by week’s end. Feeder cattle sold uneven, $2 lower to $3 higher.
The first shipments of the Certified Angus Beef ® (CAB®) brand arrived in China in November, ushering in the potential for a new, powerful buyer for high-quality U.S. beef.
The Choice beef cutout price has rallied nearly $30 in November while cash fed cattle prices have gained just $5. As a result, packer margins have increased while feeding margins struggle to remain above water.
Cattle markets entered November with solid gains across all sectors. Fed cattle rebounded with higher prices in all regions while feeder cattle jumped $2 to $7 per cwt.
Early week fed cattle sales were steady at $95 to $100 per cwt., and $150 dressed. Friday, however, saw one major jump in and buy a few thousand cattle at $105, $5 higher than last week.
During a Facebook Live address to cattlemen Monday night, R-CALF CEO Bill Bullard outlined four actions his group proposes to “restore balance to our dysfunctional cattle markets.”
The current cattle market situation creates significant disparities between the current supply and demand situation and expectations for coming supply and demand conditions.
The rally in the cattle markets continued this week with solid gains in both cash fed cattle and the boxed beef cutout. Cash cattle prices are now at a level not seen since late June.
Did outside factors or did cash trade cresting at $110 create the sell off Friday? This week’s cash bids from the packer might be the best answer to that question.
Markets will no doubt evolve this fall and producers must continue to evaluate winter grazing potential under dynamic market conditions and profit potential may vary widely.
Cattle prices rallied for the seventh consecutive week, adding $12 per cwt. over that span. Cattle on feed numbers were up 2% Aug. 1, with July placements up 11%.
Steers and heifers sold higher at auctions on the Northern Plains, with feeder cattle trading uneven at auctions in the Southeast and South Central regions.
Slaughter numbers approached year-ago levels for the week as beef packers are operating at near-capacity and wholesale beef prices continue lower.
The unprecedented events surrounding the COVID-19 pandemic have led to a severe economic downturn and will impact livestock markets going forward.
Widespread wildfires mean Australian cattle and beef production will be reduced for the foreseeable future and rebuilding, whenever it can begin, will take several years.
Latest update to CattleFax Mobile App offers new features for industry leaders at Cattle Industry Convention.