The cash market suffered a second week of consecutive setbacks, falling $2.20 last week. News of Cargill closing its plant in Plainview, Texas pushed the market lower and forced analysts to consider what the effects of the smallest cattle herd size in 60 years would have on the market. Despite recent losses, our Monday Market Sentiment panel remains optimistic, predicting an increase of 69 cents per cwt in the cash cattle market this week to $124.57 per cwt.
The Monday Market Sentiment is a forecast of the upcoming weekly cash trade (5-Area weighted average price) prices reported by the USDA. This week’s prices suffered another week of losses. The cash cattle market has decreased $4.25 in the past two weeks. Last week the USDA announced that cash trade for the week ending January 18th was 123.88, a $2.20 decrease from the previous week.
Positive and negative news over the past week have weighed on the cattle markets. The Cargill plant closure shows how far the cattle supply has fallen and a recent streak of colder weather will make it difficult for cattle to add weight. On the plus side, news that Japan will ease restrictions on U.S. beef will improve exports by making 95 percent of U.S. cattle eligible for export to Japan, compared with about 20 percent under the previous restrictions.
Each week the Cattle Trader Center, on behalf of Vance Publishing, awards a $100 gift certificate from Cabela's to the industry leader whose forecast comes closest to the 5-Area cash trade number reported by the USDA. The most recent winner was Mike Binns, Brookover Cattle.