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Cash cattle trade ended on a much better note last Wednesday after a grim start to the week.

“Feedlots have seen their Christmas wishes come true as the cash cattle market jumps $2 higher in the South while the North has yet to test this week’s market,” remarked ShayLe Stewart, DTN livestock analyst, in her Wednesday midday market comments.

Negotiated cash trade traded between $105-110 Wednesday and dressed purchases sold from $168-172. Formula cattle traded consistently in the mid $170s last week. Stewart noted the next week’s trade is anticipated to be sizable.

“It's been helpful that Wednesday’s futures complex has traded higher and continues to do so rolling into the afternoon.”

There was finally a little more green on the futures board, after trading mostly sideways Monday and Tuesday. The December contract closed on a higher note at $111.93, a little over a dollar higher than the week prior. The February contract settled at $114.72, about on trend with the week prior.

The Fed Cattle Exchange was able to sell cattle last week, after several incidences of technical difficulties. Out of 803 offered head, 545 head sold for $110, “which has feedlots grinning from ear to ear as the market should be able to trade fully higher, especially considering that the board is trading positively,” commented Stewart Wednesday afternoon.

Slaughter numbers for the week ending Dec. 18 were estimated at 659,000 head—several thousand behind the week and year prior, but still at the top of the range for current processing capacity. Slaughter for the shortened holiday week was estimated at 354,000 head as of Wednesday.

Boxed beef prices have traded mostly sideways in their seasonal downtrend, with the Choice cutout closing at $207.54 and the Select cutout at $197.93.

“During this period the value of the dollar has further declined to a multi-year low,” remarked the folks at the Cattle Report. “The decline in price and the advantage of a more favorable exchange rate will encourage export buyers. This has set the stage for entry from foreign trading partners looking for our beef to make purchases into the new year.”

Feeder cattle

“The market has had phenomenal technical support over the last month and really has blazed a path for strong fundamental support to carry feeder cattle prices higher throughout the countryside,” Stewart said.

Feeder cattle contracts were trading in the $140s all week, and the January contract closed at $140.27 and the March contract at $142.22. The CME Feeder Cattle Index was up from the week prior, settling at $139.99.

Corn prices continue to surge, and the March contract settled at $4.47 Wednesday afternoon—an increase of nearly 10 cents from the week prior. Next year’s feed prices are looking grim for livestock producers.

“Stocker operators are now looking at the same squeeze currently underway in the nation’s feedlots,” the Cattle Report remarked. “Calf prices are too high in relationship to next year’s CME feeder cattle prices. New calf purchase prices seem to be ignoring the level in next year’s feeder board.

“The cost to make a new purchase, process the cattle, absorb the death loss, pay the medicine cost, labor to look after the cattle, add in the supplemental feed and interest, would result in an outcome that frighten any banker.”

Most auction markets already wrapped up their year and only a handful of markets had sales last week. A snowstorm was expected to roll across the Great Plains Christmas weekend, making travel difficult.

Colorado: Winter Livestock in La Junta, CO, sold 586 head last Tuesday. Compared with the prior week, steer calves sold in a light test, mostly steady except 400-450 lbs. sold $2-3 higher. Heifer calves sold in a light test, mostly steady except 500-600 lbs. sold $2-3 lower.

Iowa: Russell Livestock in Russell sold 676 head Monday. Compared to the week prior, the larger groups of steers under 500 lbs. sold as much as $10 higher. The heavier steers ended mixed with not enough numbers both weeks to compare. Heifers under 500 lbs. were $5 higher with instances of $10 higher. The 500-600-lb. heifers were $1-5 lower and those weighing over 600 lbs. did not have enough to compare.

Missouri: Joplin Regional Stockyards in Carthage sold 7,500 head last Monday. Compared to the prior week, steer calves and yearlings sold steady and heifers sold steady to $2 higher. Benchmark steers weighing 776 lbs. sold between $135-143, averaging $137.64.

Nebraska: Tri-State Livestock Auction in McCook sold 1,775 head last week. Compared to the week prior, steers were steady to $6 higher. Heifers were mostly steady. Demand was good, on a nice selection offered. Steers averaging 773 lbs. sold between $148-148.75, averaging $148.46. — Anna Miller, WLJ editor

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