Cattlemen and the Cattle Market React to Winter Conditions
By ShayLe Stewart, DTN/Progressive Farmer?
Last week felt like an entire year in and of itself. With the back-and-forth jitters the cash cattle market endured from early deliveries to the continued weather pressure that affected nearly the whole country, last week, cattlemen had their hands full.
The cash cattle market has been desperate to rally higher for the last couple of weeks. With exceptional beef demand both domestically and internationally, packers have been quick to process cattle and are even more antsy to turn profits with boxed beef prices as strong as they are. Thankfully, this eagerness has helped the cash cattle market gain at least $1 or $2 over the last three weeks, and even though last week's cash cattle trade was able to secure a stronger market, the feat wasn't easy.
Early in the week, the nearby February live cattle contract was pressured from deliveries that were made as individuals with short positions looked at the market's basis and saw opportunity. When the market received these deliveries on Wednesday and Thursday, feedlots grew worried the cash cattle market wasn't going to be able to demand $1 or $2 more with the February contract now trading lower. But remembering that the cattle market loves a storm and seeing that another blanket of white powder was scheduled to hit the countryside by Friday and trickle through the weekend into this week, feedlots held out until Thursday and Friday to trade their cattle. Low and behold, their patience paid off again, as the cash cattle market secured $1 higher for live purchases and $2 higher for dressed cattle, and the nearby live cattle contracts closed sharply higher by Friday's end! Halleluiah!
In the weeks ahead...