Cash fed cattle traded into a softer market this week as the January rally paused after adding approximately $7 per cwt since the calendar flipped to 2017.

Top prices for the week were recorded on Wednesday in the Fed Cattle Exchange online auction at $124 on two groups of steers and one pen of heifers. Four other pens sold at $123 to $123.50 per cwt. In direct trade mostly on Thursday, Kansas and Texas cattle sold at $122 per cwt, $1 lower than last week. Northern cattle traded at $120 to $122 per cwt, and $193 to $194 per cwt dressed, $1 to $2 lower.

Much of the trade talk this week focused on rapidly declining packer margins, which is believed to make them less aggressive bidders on market-ready cattle. The Sterling Beef Profit Tracker calculated packer margins for the week ended January 20 at about $20 per head, fully $130 per head less than a month prior. Other analysts have reported packer margins already in the red, and would sink deeper this week.

Yearling feeder cattle were called steady to $3 per cwt lower, with much of the decline in the Central Plains.

USDA market reporters noted, “True yearlings sold unevenly steady at auctions throughout the Plains.  After last week's crippling ice storms, much warmer temperatures brought about a big thaw, only to have another storm hit the Dakotas and most of Nebraska mid-week.  With that thaw, also brought reports of muddy pens and cattle carrying ‘tag’ on sale day.  Some reports of near a foot of snow along the South Dakota/Nebraska line were commonplace.”

USDA called steer and heifer calf prices in the Southeast “steady to $5 higher,” while other regions were “steady to $4 lower.”

On Friday USDA released its monthly Cattle on Feed report with the total at 100% of a year ago. Placements in December were 18% higher than the previous year, and marketings were 7% higher.

Choice boxed beef closed the week at $192.70 per cwt, $2.28 higher than last Friday's close. The Choice/Select spread was $3.76 per cwt. USDA’s national cutter cow carcass cutout value was $162.79 per cwt.