Cattle Market Notes: Week Ending Jan 17, 2014

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Cash Cattle:

The hot streak continues for cattle and beef prices. The five-area fed steer price ended Friday at $142.39 and $227.27, respectively for live and dressed, up $2.91 and $5.79 compared to last Friday. In the Southern Plains, live cattle were about $3 higher at $142 on Wednesday. In Nebraska, live and dressed cattle sold at $142 (on Thursday) and $226-$229 (on Wednesday), respectively. Western Cornbelt trade took place on Wednesday at $139-$142 for live and $225-$227 for dressed.

Steer and heifer calves in Oklahoma City were steady to $3 higher, feeder steers were steady to $1 lower, and feeder heifers were steady to $2 higher. In Mississippi auction markets steer calves were $2-$7 lower, heifer calves were mostly steady, feeder steers and heifers were $5 higher. Cull cows were $2 lower, cull bulls were $3 higher, and replacements were lower.

Futures:

The nearby February contract took advantage of the direction in the cash cattle and beef markets, moving higher by $3.65. As the contract month moved further out the gains weakened, implying the market is in a “wait and see” mode. This is not surprising given the record breaking pace. I suspect deferred contracts want to see how demand holds up as these prices move to the retail meat case. Feeder future gains were less dramatic despite a drop in corn prices.

Corn futures were a few pennies per bushel lower this week. Dr. Williams has some comments here. I will add that pressure also came about from lower ethanol production and, more importantly, last Friday’s supply/demand report. The report pushed the market higher which led many to send grain to the market. It has been known that producers were holding their corn in storage as a result of the drop in prices. It appears they saw an opportunity and jumped in.

Beef:

Like cash cattle, wholesale boxed beef was much higher this week. Choice boxed beef finished with a weekly average of $224.62, up $14.62. Select averaged $222.17, up $15.64.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

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