Cash fed trade last week was riding the strong price tailwind from the prior week. On Friday, Dec. 27, cash cattle prices increased sharply with cattle selling $3-4 higher for live at $133-136 and $3-6 higher with $210-215—mostly $212-214—for dressed.
The cash fed trade was choppy last week, given the Christmas holiday being smack dab in the middle of the trading week. Analysts expected cattle to sell steady to $1-2 higher than the prior week’s $129-130 live and $205-209 dressed in late-week trade.
In what has been called “moderately bullish,” the most recent Cattle on Feed report showed on-feed, placements, and marketing numbers below industry expectations. The decline in placements of cattle into feedlots with a 1,000-head-or-greater capacity was especially surprising and friendly to the markets.
The proposal would allow the importation of uncooked beef from certain—previously banned—Brazilian states: Bahia, Distrito Federal, Espirito Santo, Goias, Mato Grosso, Mato Grossodo Sul, Minas Gerais, Parana, Rio Grande do Sul, Rio de Janeiro, Rondonia, Sao Paulo, Sergipe, and Tocantins.
Packers were reluctant to pay much for fed cattle last week ahead of projections of decidedly short production weeks. With estimates for this week’s production rates ranging widely between 435,000- 480,000 head, and predictions for next week’s standing at 505,000- 545,000 head, packers felt no pressure to collect cattle around them.
The December World Agricultural Supply and Demand Estimates (WASDE) report was released with little fanfare last Tuesday. Though there were some exciting production estimate moves for beef, industry eyes were on corn and soybeans, which held few surprises.
Trade was again shrugged off until Friday last week as only 2,844 cash fed cattle sales had taken place by Thursday afternoon. Analysts had predicted this was likely and expected a steady-at-best market relative to the prior week’s $132 live and $208-210 dressed market.
Thursday, Dec. 5 saw the auctioning of the long-beleaguered Aberdeen, SD, Northern Beef Packers plant. Two groups participated in the auction—Wisconsin-based American Foods Group and California-based investment banking firm White Oak Global Advisors—and it was not the food-related participant that claimed the prize.
Trade was slow to develop last week ahead and then during the sudden, intense cold weather that gripped most of cattle country. Light purchasing trickled in throughout the week, but by Thursday afternoon the bulk of the week’s trade took place at $132 live and $208-210 dressed, roughly steady with the prior week.
“This is really definitely a landmark step,” said Don Gentry, Chairman of the Klamath Tribes which has been a major player in the negotiations. “This is really positive but we have a lot of work to do as we move forward to negotiating a final agreement.
The review—full title, “Impact of grass/forage feeding versus grain finishing on beef nutrients and sensory quality: The U.S. experience”—found that the greater healthfulness of one type of beef or the other depends on how you slice it, metaphorically speaking.
The November Cattle on Feed report came in dead on the pre-report industry expectations. Though many have called it neutral for this reason, Steve Meyer and Len Steiner of CME’s Daily Livestock Report called it slightly bearish..
In this time where visions of low-cost feed combine with higher calf and cull cow prices, low interest rates on loans look very attractive. But despite the allure of low interest rates, agricultural lenders can be reticent to offer loan money to cow/calf operations.
Cash fed cattle trade was in a “wait and see” mode last week ahead of the release of the Nov. 1 Cattle on Feed report and the drastic downward movement of the futures market. By Thursday afternoon, light trade amounting to over 11,000 head for the week had sold at $130-131 live in the South Plains and $132 live and $208 dressed in the Corn Belt.