Sort & Cull

How External Factors Play a Role in the Cattle Market

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
Even though Friday's Cattle on Feed Report came out neutral, the market closed lower. (DTN file photo by Chris Clayton)

If you've been paying attention to the market, you know that last week was tough. The future's complex was down most of the week for both live cattle futures and feeder cattle futures, cash cattle trade developed on Wednesday and even though Friday's Cattle on Feed Report came out neutral, the market closed lower.

Beef slaughter continues to run aggressively; last week's slaughter alone totaled 647,000 head, 16,000 head more than the previous week and 39,000 head more than the same week a year ago. Feeders have been selling remarkably well, and especially the lighter-weight calves that will be cattle on grass come spring, and yet the market is still bearish.

Cattlemen get understandably frustrated when market prices don't reflect the current situation of the industry; however, this last week serves as a perfect example as to why we have to keep a broad view on the marketplace and avoid getting tunnel vision. We all have a tendency of thinking that the cattle industry is in its own little world and that prices only reflect what is happening within the industry.

External factors affect the cattle market as easily as high placements, weaker cash cattle prices and sluggish beef demand do. Last week, China shared that it is experiencing a disease outbreak of the coronavirus. The virus is commonly associated with pneumonia, the flu and respiratory-like symptoms. The virus can be deadly and spreads at alarming rates, and that is why the announcement of the virus has affected U.S. markets. As of Monday morning, Canada shared that it had one confirmed case and here in the U.S. there has been five confirmed cases. Without completely knowing what will be the extent of the virus and its international trade impact, the market is waiting on whether to go bearish or bullish.

Catch this week's Cattle Market News recap on the DTN/Progressive Farmer Facebook page, or click the link below: https://www.facebook.com/…

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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