CAB Insider: Cold Weather, Grade Expectations


By Paul Dykstra, Drovers 

February 17, 2021


Fed cattle prices were steady in the first half of February, averaging $114/cwt. in each of those two weeks. Live Cattle futures contracts have been pricing higher this month despite choppy movement since late last week. Several deliveries against the February contract have been tendered in recent days due to the weak basis. This has had a negative impact on the Feb contract as the market tries to force convergence with the spot cash value.


Extreme winter conditions and temperatures well below zero have been widespread across the country impacting most of the major central cattle feeding region. Feedlot weight gain will be stalled for a period of days in many cases as nutrient intake is channeled toward maintenance needs.


Some of the futures market rally can likely be attributed to the recent weather pattern that had been forecast several days in advance. The prospect and reality of lighter carcass weights plus lost production efficiencies are bullish factors for futures prices in the short term.


The other side of the coin is the smaller fed cattle slaughter last week and further processing disruptions this week due to weather impacts and rolling blackouts causing temporary plant shutdowns...






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