Cattle Current Daily—Jan. 26, 2021

Cattle Current Daily—Jan. 26, 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.

Last week, live sales were mostly steady to $1 on either side of steady at $110-$111/cwt. in the Southern Plains, $109-$110 in the Northern Plains and at $105-$110 in the western Corn Belt. Dressed trade was steady to $3 lower at $170-$173.

The average five-area direct fed steer price last week was $109.23/cwt. on a live basis, which was 29¢ less than the prior week. The average steer price in the beef of $172.58 was 48¢ less.

Cattle futures shrugged off Friday’s monthly Cattle on Feed report and resurgent grain futures on Monday. They were pressured at the outset, but closed mostly higher by the end of the day, retaining strong gains from the previous session.

Live Cattle futures closed an average of 37¢ higher (2¢ to $1.07 higher), except for 20¢ lower in the spot contract.

Feeder Cattle futures closed an average of $1.11 higher (12¢ to $1.87 higher), except for 70¢ and 30¢ lower in the front two contracts.

Choice boxed beef value was $3.91 higher at $226.73/cwt. Select was $2.87 higher at $216.21.

Grain futures bounced back Monday from the previous session’s selloff as markets carve out a new trading range.

Corn futures closed 11¢ higher through the front three contracts and then mostly 2¢ to 4¢ higher.

Soybean futures closed 21¢ to 31¢ higher through Sep ‘22 and then mostly 14¢ to 19¢ higher.

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Major U.S. financial indices closed mixed Monday with some investors apparently wary of the barrage of corporate earnings reports due this week.

The Dow Jones Industrial Average closed 36 points lower. The S&P 500 closed 13 points higher. The NASDAQ was up 92 points. 

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Drought and dryness likely helped push December feedlot placements higher than expected, say analysts with the Livestock Marketing Information Center (LMIC).

As noted in Monday’s Cattle Current, December placements were 0.77% more than the previous year, according to the monthly Cattle on Feed report. Estimates ahead of the report expected a decrease of about 3%.

“Hay supplies are tighter and the whole feed complex has moved up significantly,” explain LMIC analysts, in the latest Livestock Monitor. “LMIC has feedlots break-evens for cattle placed in December around $109 in the Southern Plains.”

“Drought persisted across much of the west in 2020 and has extended into much of the Great Plains at the current time. Several states reveal the impact of the drought on hay production, supplies and the challenges for cattle producers in those regions,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

For instance, Peel notes Dec. 1 hay stocks were 15% less in Colorado year over year and 36.4% less in New Mexico (the least since 1973). Alfalfa and other hay production for 2020 is also significantly less in those states.

“While overall U.S. hay supplies appear to be adequate, it is clear that some drought regions are experiencing severe challenges to get through the winter,” Peel says.  “The 16 Western and Plains states (not including Texas) had Dec. 1 hay stocks down 5.8% year over year.”

Although feed costs increased significantly since December, LMIC analysts point out, “In the last week, boxed beef cutout values have climbed on better demand, which has helped support cattle prices. If these prices hold, they will offset the higher feed costs, and help stabilize cattle feeding margins.”

2021-01-25T19:31:34-06:00

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