Tuesday markets
Fed cattle markets were again quiet today. Beef prices are getting stronger; the Choice cutout was up $2.48 to $210.30 however Select was down $1.17 to $195.48 on 144 loads. Slaughter levels were off a bit with 116,000 head processed today and 235,000 for the first two days of this week.
The futures markets were stronger on Monday, but they took it all back today. December closed down $1 to $112.02 and February lost $1.20 to $114.57. Feeders are in a good spot to move the market higher. It’s nice to have a little leverage for a change.
Rick Kment at DTN commented, “The momentum that cash cattle markets have going into the week should help to command higher price levels, but the biggest question now is just how much higher prices. Renewed support continues following cash cattle prices that jumped an average of $3 per cwt last week, while continued futures market support is developing through the end of the year. Cattle are starting to be priced higher with $180 per cwt asking prices seen in the North, although asking prices in the South are still hard to pin down.
“Even though packer interest may become slightly more aggressive during the day Tuesday, it is likely that trade will be delayed until Wednesday or Thursday. Live cattle futures continue to gain strong late year support with nearby contracts moving to six-week highs through the end of the session Monday. The ability for February live cattle futures to post moderate-to-strong gains in the closing hours of 2020 indicates the growing underlying support developing across the complex. But even though prices have shown potential of new life and longer-term strength, the ability to test resistance levels above $116 per cwt will be important in continuing the market support.”
The cash trade in the feeder cattle markets is slim as many markets have closed this week. The futures trade was on yesterday but off today with January losing $1.37 to $139.62 and March feeders down $1.37 to close at $141.22.
Producers Livestock auction in Salina, UT, had a sale today and offered 623 head. They said steers and heifers traded firm. Calves with an average weight of 664 lbs. traded at an average price of $131.83. Very few markets are open this week, making it difficult to find a price trend but with corn reaching $4.60 a bushel, feeders will have to sharpen their pencils.
Sioux Falls Regional Livestock auction in Worthing, SD, sold 2,066 head yesterday and said, compared to two weeks ago: Too few steers calves offered to fully test the market; heifer calves mostly steady in a light test. This week’s large offering of yearling steers was of weights not like last week, higher undertones prevailed. Yearling heifers were $3 higher, except 800-850 lbs. $5 to $10 higher. Few steers and heifer calves offered as most producers wait for the start of the New Year to start marketing; moderate demand for this light run. A nice offering of yearlings, several long strings offered in full loads and multiple load lots. Demand was very good, and the market was very active, fleshy conditions ran more towards the heavy side, but there were plenty of buyers eager to capitalize on the opportunity to buy yearlings while they still can. Benchmark steers weighing 879 lbs. averaged $137.88.
Shaylee Stewart at DTN remarked, “Tuesday ended up being a lost cause for the feeder cattle contracts as feedlots watched the corn market jump $0.09 higher in nearby contracts and close comfortably above $4.60 per bushel in the March 2021, May 2021 and July 2021 contracts. Input costs are one of the fastest ways to suck profitably out of an operation and with Tuesday’s higher corn close feedlots are on edge. The CME feeder cattle index Dec. 28: up $0.11, $138.40. — Pete Crow, WLJ publisher
