Cattle prices have moved sharply higher this week, making the third week in a row of higher cash and futures values, with a fourth week of higher cash seeming likely. February Live Cattle futures were up $1.72 compared to last Tuesday, with the April contract up 70 cents and June up $1.07. Poor feedlot performance driven by severe winter weather combined with an improving economic outlook to drive prices higher. Cash fed cattle traded higher last week, with the bulk of Southern Plains trade at $89. This week, feedlot managers seem likely to push cash values to $90 for the first time in more than a year. Boxed beef cutout values were also sharply higher, with Choice up $4.79 and Select up $5.17.
However, the beef trade has been trailing the cash cattle market, so packer margins are still weak, as evidenced by the reduced slaughter rates that packers are using to boost beef prices and limit gains in live cattle. In addition, demand for higher grading beef remains limited, with the Choice/Select spread at only about two dollars.
Feeder and stocker cattle markets are even hotter than the fed cattle market. Oklahoma City’s Monday auction called some classes of stockers as much as ten dollars higher. Much of the demand for feeder calves and yearlings resulted from reduced runs at auctions the last few weeks due to severe weather. So feedlot pens have been sitting empty and grazing operations have fallen behind in acquisition of stockers for summer grazing. March Feeder Cattle futures were up $1.15 for the week ended Tuesday, with the April contract up $1.72 and the October contract up $1.70.
Hog prices also worked higher this week, on carryover strength from the cattle markets and the improved economic picture. April Lean Hog futures were up 42 cents for the week, with May up 75 cents. Cash butchers in Sioux Falls gained a buck compared to last week, trading Tuesday at $50.
Grain prices were also stronger this week, with a weaker dollar boosting export prospects for U.S. grain. Soybeans led the grains complex, with the March contract up 41 cents compared to last Tuesday, with the May contract up more than 39 cents and new-crop November up more than 28 cents.
Exports continue very strong, even in the face of the harvest of record South American crops, with Chinese demand and the weak dollar further boosting export prospects.
Wheat prices were also higher on the weak dollar, as the March futures contract in Chicago gained nearly 23 cents, while in Kansas City the March contract was up more than 22 cents, while the new-crop July contract gained more than 21.
Corn prices were also stronger, as the March and May futures contracts gained nearly nine cents, with new-crop December up more than nine. Exports have been weaker than projected, but the softening dollar may help shore up exports through the spring and summer. The sodden soils of the Northern portion of the Corn Belt are also lending support, as some traders have already started talking about late planting as a result.
This Friday, USDA releases the Feb. 1 Cattle on Feed report, with expectations of lower placements during January due to severe weather. The economy and the strength or weakness of the dollar will also play a role in prices of both grains and livestock in the coming weeks.
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Cattle prices have moved sharply higher this week, making the third week in a row of higher cash and futures values, with a fourth week of higher cash seeming likely. February Live Cattle futures were up $1.72 compared to last Tuesday, with the April contract up 70 cents and June up $1.07. Poor feedlot performance driven by severe winter weather combined with an improving economic outlook to drive prices higher. Cash fed cattle traded higher last week, with the bulk of Southern Plains trade at $89. This week, feedlot managers seem likely to push cash values to $90 for the first time in more than a year. Boxed beef cutout values were also sharply higher, with Choice up $4.79 and Select up $5.17.
However, the beef trade has been trailing the cash cattle market, so packer margins are still weak, as evidenced by the reduced slaughter rates that packers are using to boost beef prices and limit gains in live cattle. In addition, demand for higher grading beef remains limited, with the Choice/Select spread at only about two dollars.
Feeder and stocker cattle markets are even hotter than the fed cattle market. Oklahoma City’s Monday auction called some classes of stockers as much as ten dollars higher. Much of the demand for feeder calves and yearlings resulted from reduced runs at auctions the last few weeks due to severe weather. So feedlot pens have been sitting empty and grazing operations have fallen behind in acquisition of stockers for summer grazing. March Feeder Cattle futures were up $1.15 for the week ended Tuesday, with the April contract up $1.72 and the October contract up $1.70.
Hog prices also worked higher this week, on carryover strength from the cattle markets and the improved economic picture. April Lean Hog futures were up 42 cents for the week, with May up 75 cents. Cash butchers in Sioux Falls gained a buck compared to last week, trading Tuesday at $50.
Grain prices were also stronger this week, with a weaker dollar boosting export prospects for U.S. grain. Soybeans led the grains complex, with the March contract up 41 cents compared to last Tuesday, with the May contract up more than 39 cents and new-crop November up more than 28 cents.
Exports continue very strong, even in the face of the harvest of record South American crops, with Chinese demand and the weak dollar further boosting export prospects.
Wheat prices were also higher on the weak dollar, as the March futures contract in Chicago gained nearly 23 cents, while in Kansas City the March contract was up more than 22 cents, while the new-crop July contract gained more than 21.
Corn prices were also stronger, as the March and May futures contracts gained nearly nine cents, with new-crop December up more than nine. Exports have been weaker than projected, but the softening dollar may help shore up exports through the spring and summer. The sodden soils of the Northern portion of the Corn Belt are also lending support, as some traders have already started talking about late planting as a result.
This Friday, USDA releases the Feb. 1 Cattle on Feed report, with expectations of lower placements during January due to severe weather. The economy and the strength or weakness of the dollar will also play a role in prices of both grains and livestock in the coming weeks.
