Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.
Both CME cattle futures and cash prices were lower for the second consecutive week. USDA's cattle on feed report found a record October 1 inventory as September placements were called 6% higher.
Cattle and hog finishing margins are both positive for the fourth consecutive week despite the fact cash prices for cattle and hogs were slightly lower last week.
Despite declines in both cash and futures prices, cattle feeders continue to believe cattle markets show signs of optimism.
Cash cattle and futures traded lower for cattle most of the week, while grain markets experienced a harvest rally.
Profitability for both cow-calf and feedyards is projected to improve in 2021, Sterling Marketing president John Nalivka told AgriTalk host Chip Flory.
Fed cattle prices have steadily increased since the second week in September, adding roughly $7/cwt. to the short-term low at that time. Last week saw early trade mostly at $108 to $109/cwt.
Average cattle and hog finishing margins are both positive for the third consecutive week, according to calculations in the Sterling Marketing Profit Tracker.
Producers who had the patience to hold out until Friday trade were rewarded with higher money, and packers remain hungry for cattle.