Markets: Cattle Rally Again, COF Placements Surprise
Cattle feeders held firm to asking prices and were rewarded with solid gains in all regions. The North saw a moderate trade at $183 live and $292 per cwt. dressed, $3 higher live and $4 higher dressed compared to the previous week. Trade in the South occurred at $182 to $183 per cwt., $2 to $3 per cwt. higher.
Feeder cattle sold $1 to $6 per cwt. higher and calves traded $1 to $7 per cwt. higher. Market cows were called steady to $7 higher.
Wholesale beef prices closed the week mixed. Choice boxed beef closed Friday at $300.61 per cwt., up $4.41 for the week. Select boxed beef closed Friday at $286.31 per cwt., down 35 cents for the week. Tightening supplies will continue to widen the Choice-Select spread.
Estimated cattle slaughter was 593,000 for the week, down 20,000 head compared to last year. The year-to-date total was estimated down 5.4% from year ago.
At the CME, April live cattle futures rose $1.35 on Friday to $187.90, a four-month-high close and on the week up 35 cents. May feeder cattle futures gained $2.75 on Friday to $262.075, near the session high and hit a four-month high. For the week, May feeders rose $6.45.
Some analysts see Friday’s gains in live and feeder cattle futures that produced technically bullish weekly high closes as setting the table for follow-through chart-based buying early next week. Others see larger than expected feedlot placements during January as a clue Monday’s futures prices will be lower.
Cattle on Feed
Friday’s USDA Cattle on Feed report found 11.8 million head in feedyards with capacity of more than 1,000 head on Feb. 1, 2024. The inventory was slightly above last year. Marketings during January totaled 1.84 million head, slightly below 2023.
The placement number, at 1.79 million head, was seven percent below last year. Traders called that number modestly surprising as the pre-report estimates saw placements down as much as 12%.
Placements during January were mixed across states. Kansas, for instance, recorded the largest decline with placements down 115,000 head. Conversely, Nebraska saw the largest increase as placements rose 15,000 head.
