This week has had typical early week trade on fed cattle—just a handful traded today at steady money: $110.00—while live cattle futures continue drifting higher. Meat trade has been stronger with the Choice cutout up $6.77 to $233.72 and Select stronger by $1.61 to $213.96 on 70 loads.
Futures markets were friendly today with December live cattle gaining 90 cents to $111.32 and February gaining $1.55 to close at $113.57. November feeders were up just 10 cents to
$137.35 and January feeders were up $1.80 to close at $139.72.
Packers will be buying for a short week over Thanksgiving but have elevated daily slaughter to 120,000 head for the first two days of this week. Packer margins are around $300 so packers will be filling the pipeline as consumers start to buy a head during the current COVID-19 crisis.
With a higher cutout, cattle feeders should start having some leverage on packers. The latest comprehensive weekly fed cattle report shows carcass weights down 10 lbs. at 891 lbs., which remains 18 lbs. over last year. The extra tonnage continues as a burden on the market and will continue through the fall. Quality grade grading was 0.1 percent higher at 81.6 percent, remaining seasonally high.
Cassie Fish, market analyst in The Beef, noted there are still industry worries with COVID-19. “At the same time, the rise in CVOID-19 cases across the U.S. is making cattle feeders fearful that plant slowdowns will occur again as they did in the spring. However now, all workers wear masks and face shields and undergo health checks. The social distancing measures put in place remain in place.
“So no, the catastrophic closures of April and May will not reoccur. There may be an uptick in absenteeism, but a map released by John Hopkins today clearly shows many packing plant counties COVID rates peaked in the spring, not now.
“Still this fear motivated a seller in Texas to move cattle at $110, steady with last week. More $110 bids have surfaced since this first trade as higher futures and a blistering cutout rally ensure cash will not be lower.”
Feeders have been a little softer at the auction markets but have been reporting a stronger light calf market as more optimism returns in wheat grass country. Corn markets have weighed in a bit as December corn futures have reached $4.20 a bushel.
Winter Livestock in La Junta, CO, held their seasonal feeder cattle sale yesterday and sold 7,322 head. Compared with last Monday, calves sold uneven; steers under 450 lbs. sold steady to $2.00 higher; 450-500 lbs. sold $3-5 higher; 500-700 lbs. sold steady to $3 lower; and over 700 lbs. sold $5-8 higher. Heifer calves under 500 lbs. sold steady to $3 lower; 500-600 lbs. sold $3-5 higher; 600-700 lbs. sold steady to $2 lower; and over 700 lbs. sold $3 higher. — Pete Crow, WLJ publisher