There has been some drama in the cattle market lately because of the delay in USDA reporting, poor winter weather and trade uncertainties. With all of those factors Don Close, senior protein analyst with Rabo AgriFinance, believes the cattle market is getting close to its peak.
If weather calms down in the cattle feeding region of the U.S., Close projects fed cattle prices to be around the low-$130s/cwt mark for the spring.
“The one thing that is definitely different this year is we don’t have the huge premium to basis levels this year, at least at this time compared to recent years,” Close says.
This poses a risk for disruptions in the market. Close cautions for this reason that producer may need to be “reluctant sellers” because of the lack of basis.
For Close’s thoughts on the summer and fall fed cattle market, along with potential “black swans” for protein markets watch and listen to the AgDay video above.