Tuesday’s markets were almost entirely down, though the losses were minor across the board.

The cutouts lost 13 cents for Choice at $214.51, and 1 cent for Select at $213.47. This brought the spread to a stunningly narrow $1.04.

“Domestic lean beef prices are holding $40 above a year ago and that in turn is supporting fed cattle rounds, $13 above a year ago,” observed Cassie Fish of the Beef Report.

“The biggest movers last week though were middles, the loin and rib finally making a move higher. Seasonally the cutout generally is firm the coming few weeks before moving significantly higher later in February and March.”

There was no relevant negotiated cash fed cattle trade yesterday. The weekly confirmed count rose to 754 head. Yesterday’s Fed Cattle Exchange saw roughly a quarter of the offering sell. A lot of Kansas heifers sold for $124 live for 1-9 day delivery. Other lots (all of them steers from Texas and Nebraska) went unsold.

The inability of cash cattle and beef prices to move higher has reportedly caused some nervousness in the futures markets according to DTN’s Rick Kment.

“Continued underlying pressure is seen through the live cattle trade early Wednesday morning. There are additional concerns that increased noncommercial liquidation may develop as traders continue to see little movement in cash trade and the inability to consistently move beef values higher.”

Yesterday’s settlements were as follows: February live, $126.38 (+3 cents); April live, $127.23 (-2 cents); January feeders, $145.08 (-27 cents); and March feeders, $144.68 (-32 cents).

“CME cattle futures continue their trek sideways following the three-day weekend in extremely quiet action,” summarized Fish.

“Fundamentally there is plenty of positive news around. Last week’s out-front sales for beef soared, falling short of only one week in 2019. End users obviously were enticed by the great prices, especially on middle meats. Prices pushed above a year ago and the prior week. Formula sales beat a year ago and export sales soared. There certainly is reason for packers to be upbeat about beef business.”

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