Sort & Cull

While we all enjoy spending time with our families during the holidays, unfortunately this time of year usually has a bearish affect on both the live cattle and feeder cattle markets.

For the live cattle complex, the holidays bear less interest for the market, both technically and fundamentally. From a technical sense, traders often take a couple days off for both Christmas and New Year's, as the market isn't expected to do anything significant while a large portion of investors are away. From a fundamental point of view, the market finds an even slower pace; boxed beef prices usually wane lower into the new year as retailers aren't overly aggressive, given that they've already gotten their holiday cuts bought and finding hamburger and traditional winter cuts isn't a challenge after the holiday bustle.

The cash cattle market also notes a slower pace as packers try vigorously to get enough cattle committed in the weeks prior to the Christmas/New Year's run, so that they can pay the cash market as little of interest as possible.

This exact thing is happening in this year's market as it wasn't until just two weeks ago that packers again started to commit a sizeable volume to the deferred delivery. Two weeks ago, they committed 24% of their purchases to the deferred delivery, and just last week they committed 32% of the cattle they bought to the deferred delivery. With packing plants scheduled to run slower chain speeds in the remaining weeks of 2021 -- so that laborers may have time off for the holidays -- packers are able to commit cattle for weeks ahead and get away with not participating in the cash market as their needs are already met.

The feeder cattle market also sees a slower pace during the holiday run. This week will be the last week most sale barns host sales in 2021. Granted, there will be still be some sales here and there, but by and large the vast majority of feeder cattle sales will take place this week, and that will be it for 2021. The problem that sale barns have with marketing cattle too close to any major holiday is that it's one thing to get them sold and marketed, but then the buyers have to line up trucking and processing of those cattle once they're bought, and no one wants to be hauling calves or working calves on Christmas Eve.

As we all hustle and tend to our last-minute Christmas to-do lists, know that the cattle market is also doing the same. The recent rally that the market has experienced can be seen as a blessing, but now cattlemen hope that the market can be defensive during the new two weeks and protect the market from losing too much of its recent rally while the market breaks for the holidays.

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

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