Warmer January temperatures thawed packer bids and delivered a much-needed bounce to cash cattle prices this week. Northern feedlots saw an active trade at $175 to $177 per cwt. live and $275 to $277 per cwt. dressed, $2 to $4 higher than the previous week. The South also reported an active trade at $174 to $175 per cwt., $1 to $2 higher.
Feeder cattle traded $1 to $6 per cwt. higher while calves traded $1 to $7 per cwt. higher with instances of larger gains.
Wholesale beef prices posted weekly gains. Choice boxed beef closed Friday at $300.53 per cwt., up $5.03 for the week. Select boxed beef closed Friday at $289.13 per cwt., up $6.08 for the week.
Estimated weekly cattle slaughter was 618,000 head, down 35,000 head from the same week a year ago. The year-to-date total is down 178,000 head (7.1%) from last year.
At the CME, April live cattle futures rose 97 1/2 cents on Friday to $181.675, nearer the session high and hit a 2.5-month high. For the week April cattle gained $4.30. March feeder cattle futures gained $1.525 to $239.70 on Friday, near mid-range and hit a 2.5-month high. For the week, March feeders rose $7.75.
This week’s strong gains at the CME that included technically bullish weekly high closes in April live cattle and March feeders set the table for follow-through chart-based buying early next week. However, both markets are also well into short-term overbought territory and due for corrective pullbacks soon. Fundamentally, higher cash cattle prices and tight market-ready supplies that are partly due to underperformance of animals from the early-January snow and cold in the Midwest are bullish.
Cash cattle prices are likely to remain firm in the coming weeks after the mid-January severe cold and snow in the Midwest. Having Choice-grade beef cutout again move above $300.00 late this week suggests ongoing tight supplies and good consumer demand. Seasonal patterns suggest supplies of high-quality cattle and beef will continue declining into the late February and/or March period.
