Severe cold, wind and snow combined to slow cattle movement in half of Nebraska and Iowa yesterday and today, which will curtail slaughter at some plants in this region. It is likely cash cattle prices this week will be fully steady to possibly higher this week, which is also supporting Feb LC, whose options expire this Friday and first notice day is one week from today. The weather is tough enough to impact cattle performance.
Herd Rebuilding Confirmed
Only Feb LC is escaping the negative reaction to Friday’s USDA Cattle Inventory report. This report, one that gets little attention generally, heralded the coming of more cattle in
2016. The USDA revised the 2013 inventory upwards, which combined with this year’s report clearly showing herd rebuilding, caught the analyst community zigging while the USDA zagged. Therefore the “miss” was larger than typically seen as the larger numbers of beef cows, the calf crop and cattle out on wheat all were beyond expectations. Of course this doesn’t create more cattle for 2015, nonetheless the report fits perfectly with the bearish pall over CME live cattle and feeder cattle futures.
Feb LC Continues to Gain Ground
While feeders and deferred fats scan the horizon for increased supplies, Feb LC continues to widen its lead, making a new high in the Feb/Apr LC today. Feb also took out last week’s high before retreating to slightly lower on the day.
Boxed Beef Prices Weak, Volume Brisk
Boxed beef values were down hard last week but spot volume was excellent, well over a year ago and close to 2013 and the 5-year average.
It’s Up to the Live
How much upside, if any, is in store for cattle futures this week has everything to do with this week’s cash fed cattle trade and not much else. Packers will attempt to claw back margins which have slipped back into the red. Talk is widespread this week’s kill will be in the 550,000-556,000 range. Even with the pull back in slaughter, market ready fed cattle are tight. This week’s kill will see heavy reliance on contracts and will require a larger negotiated trade volume this week than last week in order to secure ample inventory for next week’s kill.
*MP Agrilytics of Collierville, TN is a proprietary provider of comprehensive livestock and meats data, analytics and research. http://mpagrilytics.com
The Beef is published by Consolidated Beef Producers…for more info click here.
Disclaimer: The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.
A Handbook for Ranch Managers. In keeping with the “holistic” idea that the land, the livestock, the people and the money should be viewed as a single integrated whole: Part I deals with the management of the natural resources. Part II covers livestock production and Part III deals with the people and the money. Not only would this book make an excellent basic text for a university program in Ranch Management, no professional ranch manager’s reference bookshelf should be without it. It is a comprehensive reference manual for managing the working ranch. The information in the appendices and extensive bibliography alone is worth the price of the book.
You might also be interested in the supplement to this Handbook: Planned Grazing: A Study Guide and Reference Manual.