Cattle Markets Finishing Softer

The fed cattle market found itself trading mostly softer to sideways during November, said Nevil Speer, vice president of operations for AgriClear Inc., a wholly owned subsidiary of TMX Group Limited, in an article for Beef Magazine.

Fed cattle finished October at $123 to 124 per cwt.  The market then stepped back toward $119 as Thanksgiving approached, Speer said.

However, the final week of the month saw better trade with sales up $120 to 121 – just a few dollars off October’s ending mark.  That action can be interpreted in a couple of different ways.




The skeptic says the market’s September-and-October rally has stalled.  This view perceives the best that sellers can hope for going into 2018 is a market trading mid-$120s through most of the spring.

The bear case is reinforced further by flat-to-weaker boxed beef sales in recent weeks and big fall placements that require marketing come spring, Speer said.

However, the bulls say November rarely provides a strong upside, with the exception of last year’s $10 rally.  After all, it’s Thanksgiving when the meat market is focused on turkey and ham.

Yet there are some bullish indicators out there that provide some legs for this market, he said.




First, the market managed to trade sideways amid some sizeable kills, Speer said.  In fact, the USDA estimated November’s final weekly beef production at 537 million pounds, the biggest week since 2008 and 20 million pounds ahead of the same time last year.

Meanwhile, amid bigger volume, the choice cutout and the fed market were $17 and $7 better, respectively, versus 2016, he said.  Something must be going right for the beef complex.

To that end, everything on the demand side has been favorable, and demand bulls have had the upper hand, Speer said.

However, big supply also tugged on the rope and created potential for the market to slip.




The USDA’s November Cattle on Feed report revealed that October provided yet another month of bigger year-over-year placements as feed yards received 2.39 million head, 10% more than last year and 5% ahead of the five-year average.

With the exception of February, every month during the past 12 had bigger placements, he said.  More importantly, the six-month total is 10% larger than 2016, all meaning more cattle to market as it transitions into spring.

Placements in Nebraska, Iowa and South Dakota were especially large, Speer said.  The three states combined for a monthly record of 909,000 head, or 38% of all placements, also a record.  Clearly, Corn Belt cattle feeders intend to market abundant corn supplies through cattle.

Meanwhile, the North Dakota Extension team recently released a long-term assessment of data sourced from the Cow Herd Appraisal Performance Software.  The data say cowherd reproduction benchmarks (pregnancy, calving and weaning rates) have been unchanged for the past 15 years, showing technical stability by producers.




Two lots of fed cattle sold Wednesday on the Livestock Exchange video auction at $120 per cwt, up $4 from last week’s thinly tested market.

Cash cattle trade took place at $120 per cwt on a live basis in the Plains, steady to up $1 from the bulk of last week’s action.  Dressed-basis sales were reported at $190 to $191 per cwt, up $2 to $3.

The USDA’s choice cutout Thursday was up $0.03 per cwt at $198.12, while select was up $1.38 at $186.87.  The choice/select spread narrowed to $11.25 from $12.60 with 82 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $151.84 per cwt, down $0.63.  This compares with Thursday’s Jan settlement at $142.92 per cwt, up $1.15.