In this file:
· Cattle Face a Turning Point
· Cattle Markets Begin 2019 Steady To Higher
Cattle Face a Turning Point
After a rally, cattle prices face a turning point.
By Rich Nelson, Allendale Inc.
Successful Farming/Agriculture.com - 1/5/2019
This week's trade will range from $121 - $123. Most sales will be at $123 and then $122. We will call this close enough to last week to be labeled as "steady money." However, this week may be more remembered as a minor turning point in what had been a heck of a rally. Don't forget that February futures rallied 8.27 from the low on November 14 up to the high on December 31. We are already 3.02 off that peak.
The reason for the change is weather. The last phase of this month and a half rally came from the forecast for snows then the actual finding of it. We have both clear skies in the current forecast as well as rising temperatures. Yesterday we noted Garden City, Kansas, would see up to 54 degrees on Tuesday. Friday's forecast update has moved that up to Sunday (temps rising even faster than expected).
One thing which may be confirming this change is wholesale beef. Through Friday morning, the week as a whole will still end higher. However, losses for choice and select were noted both Thursday and again Friday.
Much of that data that we rely on comes from USDA's Washington, DC, office which is closed. However, the daily and weekly kill estimates out of the St. Joseph, MO USDA office are still being reported. USDA's weekly packer survey found an estimate of 520,000 head for this week’s run. That was just over our 516,000 estimate from this morning. This number is 4.6% under last year. We don’t get too excited about the year/year comparison here due to the mismatch in holidays vs. last year. We will point out the past six weeks have averaged 0.5% over last year. General slaughter rates for 2019 should run about 1.0% to 2.5% over last year.
Friday's monthly employment report from the Department of Labor was a big win. 312,000 jobs were added to non-farm payrolls. That was the best since February! It was also far above the 177,000 trade expectation. This may help quell some fears noted by outside markets.
Allendale is short-term negative to the cattle market...
Cattle Markets Begin 2019 Steady To Higher
Greg Henderson, Drovers
January 4, 2019
Cash fed cattle traded at steady prices this week while feeder steers under 700 pounds sold at higher to sharply higher prices.
The bulk of fed cattle traded Thursday at $123, steady money with the week before. Cattle sold on a dressed basis at $193 to $195 per cwt. Closeouts the previous week saw average feedlot profits of $103 per head at those prices.
Boxed beef cutout prices were mostly steady on the week. Friday’s Choice cutout closed at $214.51, up a dime from the previous Friday. Select cutout closed Friday at $207.52, up 14 cents from the previous week. The Choice-Select spread was $6.85.
Compared with two weeks ago, steers under 700 pounds sold at auction $1 to $4 per cwt. higher, with instances of up to $9 higher in Nebraska. Steers weighing more than 700 pounds sold steady to $4 lower...