Cash fed cattle prices ended up mainly $3 higher last week at $123/cwt. ($2-$3 higher in the western Corn Belt at $122-$123). Dressed trade was $3 higher at $195.
That helped renew support in Cattle futures. Traders also were eying another round of severe winter weather in the Northern Plains that will slow production.
Except for 25¢ lower in the back contract, Live Cattle futures closed an average of 78¢ higher (35¢ to $165 higher).
Except for 5¢ lower in spot Jan, Feeder Cattle futures closed an average of 64¢ higher (22¢ to $105 higher).
Choice boxed beef cutout value was 21¢ higher on Monday afternoon at $205.07/cwt. Select 64¢ lower at $199.52.
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Major U.S. financial indices closed higher on Monday, supported by quarterly earning reports and hopes that a short-term spending bill passed by the Senate would also receive House approval, reopening the government for at least a couple of more weeks.
The Dow Jones Industrial Average closed 142 points higher. The S&P 500 closed 22 points higher. The NASDAQ closed 71 points higher.
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The percentage of cattle on feed for more than 120 days during the fourth quarter remained below the prior year, according to the January Livestock, Dairy and Poultry Outlook. Analysts with USDA’s Economic Research Service (ERS) note that dry conditions in the Southern Plains stressed pasture availability, supporting strong placements of calves in feedlots in fourth-quarter.
“Given expected pressure on fed cattle prices from larger placements in second-half 2017, feedlot operators will likely have incentives to continue to aggressively market finished cattle in 2018,” explained analysts with USDA’s Economic Research Service (ERS). “As feedlots are expected to maintain a rapid pace of marketings in the first half of 2018, the percent of cattle on feed beyond 120 days should stay relatively low.”
ERS analysts project the 5-Area fed steer price at $120-$124/cwt. in the first quarter and at $115-$123 in the second.