Cattle traders hope this week’s activity signals an end to the beating the market has suffered through most of the first two months of this year. Early week trading in Chicago saw cattle futures continuing to march lower and limited cash cattle sales were reported another $2 to $3 lower at $156 to $157.
Thursday, however, the bulls came out in full force igniting a rally in Chicago that extended into Friday’s trading. That gave support to feedyards sellers who had been holding out for higher prices and the bulk of the week’s trade occurred at $159 to $160 live, steady with last week, for sure, but at least $3 higher than the early-week sales.
Cash fed cattle at $160, however, still leaves feedyards writing closeouts in red ink.
Breakevens on marketed cattle are estimated in the $165 to $168 per cwt. range, which would put most losses in excess of $100 per head.
Packers are faring much better, as their losses are estimated at $95 per head or more. That’s why they slowed their kill the previous week in an attempt to drive beef cutout values higher. The strategy appeared to work as this week’s cutout prices gained $7 to $8 per cwt. The Choice cutout closed Friday at $247.58, up $7.27 from the previous Friday. The Select cutout closed at $245.57, up $7.78 for the week.
Yearling feeder cattle traded mostly $2 to $5 lower for the week, with calves selling unevenly steady. Market reporters noted curtailed receipts throughout much of the Southwest and Southeast as late-winter storms moved across the trading areas.
Slaughter cows and bulls sold steady to $2 per cwt. higher in a light test. USDA's Cutter cow carcass cut-out value Friday afternoon was $228.44, down $1.02 per cwt. from the previous Friday.