After reaching 3½- to 4-year lows in mid-December, cattle futures have rebounded. February futures have climbed 14.5 cents per pound (12%) in just over a week, reaching the highest level since early November. While prices consolidated just below the recent high at 137.40 this week and may slip further over the near-term, the market has rallied decisively; that should support higher fed cattle prices into late winter or early spring. The futures rally has been reinforced by higher beef and fed cattle prices.

The backlog of market-ready cattle is easing as carcass weights decline. The winter storm in the Plains will also impact feedlot performance. Domestic beef demand also seems to be improving, although export demand is likely to remain a limiting factor.

This month’s Cattle on Feed report helped spark the price recovery. November feedlot placements came in lower than expected, falling 10.8% from a year ago to 1.601 million head. This is the lowest placement figure for November since the large lot series began in 1996. Cattle marketed during November were up 3.9%, fractionally higher than trade expectations at 1.532 million head. There was an extra slaughter day during November this year compared to 2014. Cattle on Feed as of Dec. 1 total 10.794 million head, about steady with a year ago, but about 100,000 head below expectations.