The cattle and beef markets had to straddle the Christmas holiday last week, just like they are doing this week with the New Year’s holiday. However, many elements of the markets—most notably the cash feeder auctions—simply opted out.
But those parts of the markets that did see movement were in the Christmas spirit. There was a lot of green to be seen.
The negotiated cash fed cattle trade didn’t get started until after Christmas, but the early prices suggested cattle feeders weren’t getting coal for their Boxing Day gifts. Even though only 1,464 head had been confirmed sold for the week as of Thursday afternoon, prices were up at $122 live and $192 dressed.
The feeder cattle auctions were mostly silent last week, with almost all of the surveyed auctions not holding sales during the Christmas week. Several also noted they will not be holding sales this week or even next week, so it will be a while before we know what’s going on in the cash feeder markets.
The one exception last week was the Sioux Falls Regional Cattle Auction, which held its Monday sale as usual. 1,066 head of feeders sold, compared to 5,134 head the week before. This of course made comparisons difficult. Feeder heifers were called steady with higher undertones. The small offering was said to have good demand with active buyers. Offered calves were described as mostly weaned and preconditioned in light to moderate flesh.
One lot of 12 head of medium and large #1 yearling steers averaging 723 lbs. sold for $146. Four-weight steer calves sold between $175.75-186.
Given the lack of activity in the cash feeder cattle markets, most feeder attention was on the futures.
“Although prices seem to be focusing on increased underlying gains, the overall volume in the complex still remains limited, allowing for sluggish market moves and the potential for wide market swings without significantly impacting the long-term direction of the market,” commented Rick Kment on Thursday morning.
“With January futures bouncing off support levels of $143.52 per cwt seen early in the week, the potential to spark limited but supportive interest through the end of the year is quickly developing.”
By close of trade Thursday, the near-term feeder futures had gained about $1 over the course of the week with $145.45 for January and $145.18 for March. Gains were similar in the near-term live contracts which settled Thursday at $123.28 for December and $126.80 for February.
“There is a winter storm forecast to impact a chunk of cattle feeding country this weekend,” reported Cassie Fish of the Beef Report on Thursday morning.
“Snow, wind and falling temperatures will affect northeastern Colorado all the way up through Nebraska and into the Dakotas and Minnesota. Snowfall amounts vary from 4”-16” depending on location and there is plenty of time for the storm track to alter before this weekend.”
Fish noted that word of the storm plus the expectation of still higher cutouts were giving the futures a boost.
The Choice cutout gained a net 45 cents over the week to close Thursday at $210.15. The Select cutouts saw more impressive gains of a net $4.22 with a Thursday close of $205.25. The storm also could play a role in cutting kills over the weekend and into this week, which would also help cutout prices.
“Boxed beef prices are expected to rebound sharply, as much as $10 over the coming days thanks to a sharply holiday-reduced slaughter,” Fish commented.
“The USDA released the latest grading data and for the first time since June, Choice+Prime grading pushed above a year ago. Cattle feeding weather is stellar, which will support grading and carcass weights above a year ago. But thanks to a slaughter pace that continues to consistently surpass 2018, market-ready fed cattle supplies are current, even if some cattle are beating the projected out-weight.” — Kerry Halladay, WLJ editor
