The markets straddling the change-over of the decades were more than a little disappointing. On the last days of 2019, the markets were mostly down if they moved at all, and in the first days of the new year this trend continued.
“Other than remembering to replace 2019 with 2020 when signing dates, not a lot has changed so far in livestock trade as traders meandered into the market following the midweek holiday,” noted DTN’s Rick Kment on Thursday morning.
“Any hopes of great market revelations after the first of the year have yet to be seen, and could allow markets to hover in a narrowly mixed range through most of the session.”
The two highlights of the week were the December live cattle contract and Thursday’s dressed cash cattle. Everything else that moved last week was down as of close of trade Thursday.
With only 5,442 head of negotiated cash fed cattle confirmed sold for the week by close of trade Thursday, there were not enough sales for a proper market trend. Prices on Thursday were $125 live and $193-198 (average $195.43) dressed. If representative, these prices would have been steady to up $2.50 compared to the prior week’s averages.
The December live contract left the board on a high note, closing for the last time on Tuesday with its contract high of $124.70. All the other near-term CME cattle contracts, including the new on-deck live cattle contract, were in the red week over week. Thursday settlements and difference from Friday, Dec. 27’s settlements, were as follows: February live, $125.78 (-92 cents); April live, $126.48 (-$1.30); January feeders, $144.65 (-90 cents); and March feeders, $143.73 (-$1.07).
“Today, much like last year’s first week of January trade, cattle futures are selling off,” observed Cassie Fish of the Beef Report.
“Today’s futures break has the feel of fund selling and perhaps some unwinding of long cattle/short hog spreads. Technically more consolidation is occurring as the market snakes around its moving averages. The market has taken out last week’s lows, but last month’s lows are quite a ways off.”
The Choice beef cutout also set a new low, making a lie of the earlier seasonal low of $209. As of Thursday last week, the Choice cutout fell to $208.25, down 71 cents from the prior Friday. The Select cutout also lost ground, closing Thursday at $202.63 (-$1.94).
“Many end users haven’t returned to work or have just returned to begin calculating what is needed to replenish inventories. That’s a prime reason why the beef cutout values have just bottomed, but not much else,” explained Fish on Thursday. “Expect an improvement in cutout prices next week. The next big food event is the Super Bowl, held Feb. 2. Wholesale beef prices are attractive, the cutout about $5 cheaper than 2019.”
There were very few feeder cattle auctions that were held last week during either the last days of 2019 or the first days of 2020. Several of the surveyed auction markets had notices that sales would start back up this week or next week.
Of the three surveyed feeder auctions that had sales scheduled last week, only two managed to happen. The Sioux Falls Regional Cattle Auction had a sale planned for Monday, Dec. 30, 2019, but the winter storm that rolled through the area resulted in it being canceled. The report stated the storm “closed the interstates and made travel very hazardous,” but the regularly-scheduled sale will happen this week.
The Bloomfield Livestock Market of Iowa held its IMBIO feeder cattle special sale on the last day of last year. The program with Boehringer Ingelheim offered calves and feeders under the Range Ready program.
Over 1,800 head of feeders sold at the Bloomfield Livestock Market, though there was no trend due to no recent comparable sales being held. Trade was described as very active and demand was very good. Steers made up 56 percent of the completely feeder offering. One 109-head lot of medium and large #1 class, 768-lb. yearling steers sold, averaging $144.29. A 54-head lot of #1, 445-lb. steer calves sold for $176.
The other auction that managed a sale on the last day of the year was the Huss Livestock Market of Kearney, NE. The offering was much lower than the week before at only 1,800 total head sold, of which 1,720 head were feeders. This compares to the prior sale’s 4,192-head offering. The sale report noted that several consignments had cancelled due to heavy snow accumulation and drifting snow in the area.
The disparity in offering sizes at the Huss Livestock Market meant there were too few comparable sales last week for a market trend. Still, there were order buyers in the seats and some farmer feeders as well. The offering was described as mostly in medium flesh with some fleshy lots. A trio of #1, 7-weight yearling lots sold, with the standard lots selling for averages of $153 and $155.89, while the fleshy lot averaged $147. — Kerry Halladay, WLJ editor
