Cattle Market Reports and Analysis
Cattle futures traded on both sides of unchanged before heavy selling emerged in the afternoon sending prices sharply lower into the close.
News of HPAI in dairies in the southern plains gave futures bears reason to react early last week, and the negative psychology spilled over into the cash trade as all regions traded lower.
Cash fed cattle prices reached new record highs in all feeding regions last week, but the trade was a bracket-buster for packers who were forced to pay up as wholesale beef prices declined.
Cattle feeders displayed their market leverage this week as active trading pushed prices to new record highs. Friday’s Cattle on Feed report identified another strong placement increase.
Mexico has become one of the major beef import sources for the U.S. as beef trade evolved from simply supplementing deficit beef production in Mexico to bilateral, product specific trade between the two countries.
All classes of cattle sold at higher prices for the week and most are at or near record highs. Supplies of all classes remain extremely tight.
Lean beef trimmings, a key component of ground beef production, have rallied significantly, with the price of 90% lean trimmings quoted over $317 per cwt. the first week of March, an all-time record dating back to 1978.
Beef packers slow harvest lines and scramble for inventory as they attempt to keep a lid on cash prices.
Negotiated cattle prices moved higher again as supplies continue tightening. Packers are caught in significant margin squeeze with marketing leverage continuing to favor cattle feeders.
All classes of cattle and futures prices moved higher for the week ending March 1. April live cattle closed at the highest level since early November.
Futures markets lend support to cash as packers looked to add inventory ahead of Cattle on Feed report.
Cash cattle posted solid gains this week as futures prices closed the week with four-month highs. Friday’s Cattle on Feed report met expectations with the exception of placements, which were higher than anticipated.
The January thaw across most of the cattle feeding regions helped spur the year’s first weekly gains for market-ready cattle. The rally was noticed by traders in Chicago as futures markets posted 10-week highs.
Despite a state-wide drought and market challenges into fall, average prices for Show-Me-Select heifers posted healthy prices at six sanctioned sale locations.
Negotiated cash trade finished the week in a standoff with few sales and little price movement. Feeders and packers both look to benefit from improving winter weather and pen conditions this week.
The onset of severe cold temperatures and snow in a broad spectrum of cattle feeding regions will pull fed cattle production down. Beyond the reduced weekly slaughter head counts, carcass weights are set to plunge.
Severe winter weather across cattle feeding country reduced weekly harvest and damaged feeding performance. Cattle feeders will seek higher prices this week.
Brutal winter weather disrupted cattle markets and significantly curtailed cattle harvest in western Kansas. Cash cattle trades were steady to lower while wholesale beef prices posted a significant rally.
There remains a lot of noise around the issue of LRPs in the cattle markets. That was best described by one of my readers last week: “[most of the critics] don’t even understand the facts, let alone the myths.”
Economics and the impact on weights – both longer-term and decisions based on short term factors will play an important part in determining beef production in 2024.
After reaching a peak price in August, cull cow and bull prices moved higher to end the year on a positive note.
A year ago feeders were concerned about weathered cattle and tough pen conditions and how at times it would be the motivation for sellers to take the market. It’s eerie how not much has changed in that sense.
Cash fed cattle prices traded at higher prices the first week of the New Year despite a significant decline for wholesale beef prices.
Feedyards saw higher cash cattle bids for the second consecutive week as the market closed the year on an upswing. Futures prices finished the week lower.
Multiple packers participated last week in a market that turned higher for the first time since Halloween.
December’s Cattle on Feed showed December feedlot inventories were 102.7 percent of last year. Texas on feed number was up 4% and Kansas was up 7%.
Cattle traded in moderate volumes at higher prices, posting the first weekly gains in more than six weeks. USDA’s Cattle on Feed total was 2% higher.
The pool of bred beef heifers is likely to remain low going into 2024, keeping the prospects of beef cow herd growth minimal in the coming year.
Increased packer margins in recent weeks has encouraged a quicker chain speed. That speed likely will not be supported through the end of the year with two Holiday shortened weeks.
LRPs and options are essential risk management tools, but coffee shop talk suggests LRPs are driving the cash market lower. Let’s examine the data to keep the discussion measured and objective.