It's easy to get into the holiday spirit between Thanksgiving and Christmas and to want to let the importance of monitoring the marketplace subside until after the new year. For a lot of cattlemen, it's especially easy to do so over the holiday weeks as the market's importance rolls to the backburner and chores are done as fast as possible to spend time with family, but feedlots don't have that same luxury.
As boxed beef prices tend to see significant support leading into the new year, feedlots must take every opportunity between now and Jan. 1 to move the fat cattle market higher. Luckily, last week feedlots were about to do that as live cattle sold $1.00 higher than the previous week, and dressed cattle sold $2.00 higher. Given the noteworthy support that's developed throughout the futures market and through the latest bullish Cattle on Feed Report, feedlots have stumbled into an opportunistic time and could move the market in the short term.
There are a lot of questions about what 2021's first quarter will pan out to be. How will a Biden administration affect/influence the cattle market? Typically fed cattle supplies are tight through the first quarter and somewhat through the second quarter, but with the mix-up in this year's cattle marketing cycle more cattle are expected to be available in the late winter/early spring months -- how will that affect the historical spring rally? And we can't overlook the industry's creeping corn prices. Though today's levels aren't by any means historic, how will they influence both fat cattle and feed cattle sale?
Your assumptions are correct -- with plenty of unknowns already developing for 2021 to answer, cattlemen and feedlots alike cannot afford to let today's opportunity pass them by. Taking advantage of any market potential is vital for the last few weeks of 2020 and could offer a better position heading into 2021.
Tune into the latest Cattle Market News Update on the DTN/Progressive Farmer Facebook page by visiting here: https://fb.watch/…
ShayLe Stewart can be reached at firstname.lastname@example.org
(c) Copyright 2020 DTN, LLC. All rights reserved.