This cash cattle market has been vigorously trading higher during the last six weeks, adding close to $10 to its market, but last week's steady trade in both the North and the South has some folks wondering what this week's market will do.
Their concerns largely stem from the fact that boxed beef prices have begun to seasonally trade lower and could continue to do so throughout most of March. Both February and March have historically been tough boxed beef months, but by the end of March demand usually picks back up as spring weather encourages more time outside and more grilling.
Even though boxed beef prices have seen a little pushback lately, prices are still incredibly high. Last Friday, choice cuts closed the week at $284.91, which is $30.97 higher than a year ago. And select cuts closed the week out at $271.54, which is $24.17 higher than a week ago.
While seeing seasonal shifts or adaptations in the market is important to note, we can't allow ourselves to become single minded and only focus on one side of the market. Yes, boxed beef prices have ran into some seasonal pressure, but showlists are still incredibly thin. We simply don't possess the number of cattle we had in past years; this should encourage feedlots to continue to drive cash cattle prices higher.
This Friday, the market will see yet another Cattle on Feed report released, and its findings are expected to be similar to reports of the last two months -- fewer cattle on feed, lighter placements and extremely aggressive marketings. It wouldn't be a surprise to see placements down sharply as feeder cattle sales have been reporting lighter runs.
Last week, negotiated cash cattle trade took place on Thursday and Friday. Northern dressed cattle traded from $261 to $268.50, but mostly at $265, which was fully steady with the previous week's weighted average. Southern live cattle traded for $163 to mostly $165, which was also fully steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 79,854 head. Of that, 75% (59,516 head) were committed for the nearby delivery, while the remaining 25% (20,338 head) were committed for the deferred delivery. New showlists appear to be somewhat smaller in Texas, and smaller in Kansas, and Nebraska/Colorado.
In conclusion, while the market may see some hesitancy from boxed beef prices, there are still plenty of reasons why feedlots should continue to drive prices higher while they have the opportunity to do so.
ShayLe Stewart can be reached at firstname.lastname@example.org
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