By Cassie Fish, http://cassandrafish.com

USDA choice boxed beef values surged this morning to levels not seen since Q1 2022. This morning’s quote of $279.10 was up $7.15 from Friday’s close, bolstered by end users scrambling to find product at any cost. Last week’s F.I. cattle slaughter of 562k head was much smaller than anticipated earlier in the week and 62,000 head fewer than the prior week. It is expected that more plants will run this Saturday as some packers maneuver to increase production to have beef to sell at higher money. But yesterday plants were dark, so a small holiday slaughter week is a fact.

Packer margins have returned to black ink. Packers put the brakes on purchasing negotiated cattle last week with under 40k head reported as of Friday afternoon, so it cash cattle prices may end up higher again this week. Show lists are up too and cattle gains slowed last week thanks to frigid weather. Further, slaughter levels will pick up after the New Year’s holiday, so a larger cattle buy is anticipated this week.  It is unlikely cattle prices will be so strong they offset the vast improvement in beef values.

Futures are indifferent to the fundamentals today, trading choppily both sides of steady after a positive Friday close on increasing open interest. Feeder cattle futures are getting pummeled by a technical surge in corn futures today, corn making a new high for the month right as the year is going to close out.

Friday’s USDA Cattle-on-Feed report was full of friendly statistics, the largest November fed cattle marketings since the USDA began keeping this price series in 1996 and 312k head fewer cattle on feed December 1 than a year ago and the smallest December 1 number since 2017. This will be theme throughout 2023, dramatically fewer cattle on feed than 2022. Talk is December placements will be down 7 percent or more from December 2021.

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