Cattle Current Daily—Feb. 23, 2021

Cattle Current Daily—Feb. 23, 2021

Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.

Live sales last week were at $114/cwt. in the Southern Plains and Nebraska; at $114-$115 in the western Corn Belt. Dressed trade was at $180-$181 in Nebraska and at $180-$182 in the western Corn Belt.

Last week’s five-area direct average steer price was 39¢ higher on a live basis at $113.99/cwt. The average five-area dressed steer price was 47¢ higher at $180.57.

Despite rising Corn futures prices and higher feedlot placements than expected (Friday’s Cattle on Feed report), Feeder Cattle futures shook off early pressure to mostly extend gains. Live Cattle futures closed narrowly mixed, though, amid plentiful fed cattle supplies and short-term uncertainty.

Live Cattle futures closed narrowly mixed, from an average of 28¢ lower across the front half of the board to an average of 16¢ higher.

Feeder Cattle futures closed an average of 27¢ higher, except for an average of 32¢ lower in the back two contracts.

Choice boxed beef cutout value was 75¢ higher Monday afternoon at $239.98/cwt. Select was $2.08 higher at $229.98.

Grain Futures rebounded with last week’s USDA forecast during the Agricultural Outlook Forum.

Corn futures closed mostly 6¢ to 9¢ higher.

Soybean futures closed mostly 5¢ to 15¢ higher.

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Major U.S. financial indices closed mixed Monday. Primary pressure stemmed from a selloff in big tech stocks, as well as continued nervousness over rising Treasury yield rates—potential implications for higher interest rates and economic recovery. 

The Dow Jones Industrial Average closed 27 points higher. The S&P 500 closed 30 points lower. The NASDAQ was down 341 points.

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“The feedlot situation in early 2021 is a carryover from the disruptions and unusual dynamics last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “For the entire year in 2020, feedlot placements were down 4.0%. In the last half of the year feedlot placements were almost unchanged year over year, up 0.3%.  However, this average belies dramatic dynamics as feedlot placements in the third quarter were up 8.5% year over year, while placements in the fourth quarter were down 7.0% from the prior year.”

Peel points out total estimated feeder supplies outside of feedlots Jan. 1 were 25.66 million head, down 0.2% year over year. Even when adjusted for decreased veal slaughter and increased feeder cattle imports, he says the 1.3% year-over-year decrease in the 2020 calf crop would have suggested a bigger decrease in the feeder supply to start the year.

“It appears that some feeder cattle were carried over into 2021 and likely is reflected in the relatively large January placements,” Peel says. “Feeder supplies are somewhat front-loaded early in 2021 but should tighten up in the second half of the year.”

As reported in Cattle Current Monday, feedlot placements in January were 2.017 million head, according to the latest Cattle on Feed (COF) report. That was about 3% more year over year and about 3% more than pre-report expectations.

Peel shares one other note about the COF.

“January marketings were 1.822 million head, down 5.6% from one year ago and about as expected. However, January 2021 had two less slaughter days than the year before meaning that daily average marketings this year were 3.8% higher than last year,” Peel explains.

2021-02-22T19:22:32-06:00

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