As the market officially steps into the first week of spring, feedlot managers know they've got very little time to boost cash cattle prices before market-ready supplies of cattle increase.
Last week feedlots put up a good fight in their quest to push cash cattle prices higher as trade waited until Wednesday and Thursday to really get underway. Live cattle traded from $136 to $138 last week, but mostly at $138, which is considered fully steady with the week before. Northern dressed cattle traded from $219 to $225, but mostly at $221 to $222, which is $1 to $2 higher than the week before. Last week's negotiated cash cattle trade totaled 74,899 head. Of that, 78% (58,202 head) were committed for nearby delivery, while the remaining 22% (16,697 head) were committed for deferred delivery.
On March 25, we'll see another Cattle on Feed report from USDA. I don't foresee placements to be up drastically, but total numbers of cattle on feed will be staggering as the market has had nowhere else to go with cattle other than the feedlot. Given that the market is in a vulnerable state as it tries to interpret how to manage technical and fundamental cues, along with unbridled inflation and ongoing challenges of war, it wouldn't be surprising to find Friday's Cattle on Feed report bearish.
The glut of fed cattle supplies is expected to hit the market around May. 1 But with how open and feeding-friendly the winter has been, calf-fed fats are ahead of schedule and could pressure the market sooner than we expect. Therefore, feedlots cannot squander any time and need to work aggressively in this week's cash cattle market to rally prices again.
Throughout Monday's early trade, both the April and June live cattle contracts sheepishly traded lower while the rest of the market aimed at slightly higher thresholds. Last week's market was able to rally amid a supportive futures complex, but if feedlots don't receive the same kind of technical support this week, many wonder if they'll be able to stiff arm the cash market into trading higher on a solely fundamental basis. Boxed beef prices are supportive, packers are short bought and showlists again favor the feedlots' position. New showlists appear to be mixed, higher in Kansas, but lower in Texas and Nebraska/Colorado. Time is always valuable, but it's inherently valuable now as feedlots know market-ready supplies of fat cattle are lingering.
ShayLe Stewart can be reached at firstname.lastname@example.org
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