Sort & Cull

Jan. 23 wasn't a day to be caught sleeping behind the wheel, as the market kicked into high gear as it received the monthly Cattle on Feed report, but also had stronger sales developing in the fed cash cattle market.

The most thrilling news that developed on Friday was in the fed cash cattle market. Last week, Southern live cattle traded at mostly $233 to $235, which is steady to $2 higher than the previous week's weighted average. Northern dressed cattle traded at mostly $370, which is $5 higher than the previous week's weighted average. The total volume traded in the fed cash cattle market totaled 73,362 head, of which 81% (59,447 head) were committed for the market's nearby delivery, while the remaining 19% (13,915 head) were committed to the market's deferred delivery option.

Then came the Cattle on Feed report, which was neutral-at-best news. To quickly summarize the report, the biggest line item that needed to be studied was the placement data, which was down 5% compared to a year ago, but not down as significantly as what pre-report surveys had anticipated. Read the USDA Jan. 1 Cattle on Feed report here: https://www.dtnpf.com/….

Do note that later this week, the highly anticipated Cattle Inventory report will be shared on Jan. 30. This report will unveil where the U.S. beef cow herd sits regarding whether any expansion is underway in the countryside. And the industry is largely mixed on what the report is going to unveil. Some believe that some light expansion is occurring, while others believe that we've merely maintained numbers and haven't fully jumped into expansion mode just yet.

I personally am skeptical to say that widespread expansion has occurred. Although some operations have begun the process mildly, there's been equally just as many operations choosing to either capitalize on these high prices and sell out completely, or simply elect to sell their entire calf crop at these record-high prices.

It's going to be another week with an impact in the cattle complex, and we need to stay diligent about tracking the developments.

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

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