The cattle market continues to set new records in both the futures and the cash.
Fed cash cattle hit a new record high for a fourth straight week with the five area weighted average at $210.79, up $7.12 from the previous week.
That, combined with the border still being closed to Mexican feeder imports has also pushed both live and cattle futures to all-time highs.
Last week’s cash in the South was mostly $201 to $202.
However, the Northern market traded well above that at mostly $328 to $330 dressed and
Brad Kooima, Kooima Kooima Varilek, says, live sale prices were up $6 to $8 from the previous weeks weighted averages.
“We finished at $211 to $212 and in some cases cattle that were sold Friday are already on the way to be slaughtered this morning.”
The live cattle futures are trading at a discount to the fed cash market, so that has pulled up the board.
It’s hard to know where the charts project to next, according to Scott Varilek, Kooima, Kooima Varilek, as we’re in uncharted territory.
“We’ve got a very positive basis, the cash leading the market here. We’ve got bull spreads working the markets higher. So with that basis and everything, we’ve got all signs still pointing that we are uptrending in this market here. And where it stops, nobody knows,” he explains.
The cattle on feed report added some fuel with marketings at 101%. while the on feed number was at 99% and placements at 96.7%, both below trade guesses.
Kooima says, “The placement number down a little bit compared to expectations. They thought it was going to be 100%, it was a 97% and largely driven by the border closing The Texas placement was 77%. So obviously that draws down the whole deal.”
While record high cash prices for feeders have slowed rebuilding, the quarterly placement breakdown in the report may indicate the first sign of female retention.
“So every quarter you get a breakdown of steer and heifer replacements. So this time heifer replacements were down 3.4 % year on year. They were 38 .7 % of steers where the last time they were 39 .7%,” he adds.
The feeder futures have also been hitting all-time highs, pushed by tight supplies and with the border still closed to Mexican feeder imports due to New World Screwworm.
Dan Basse, Ag Resource says the reopening will be slow.
“We’re hearing that the border may open in early February. It’s going to be a trickle to start,” he says.
Basse says consumer beef demand has also remained strong this winter, and the grilling season is right around the corner.
“The beef market’s really not showing any rationing. Prices are high, consumers are still buying and so we’ve not reached that price level that we either swap out to chicken or pork or see any demand cutbacks,” he remarks.
Plus, the market should get another bullish shot in the arm with confirmation of the historically small herd in this week’s USDA Cattle Inventory Report.
