Signs the Cattle Market is Poised for a Spring Rally

The COVID-19 pandemic continues to challenge the beef supply chain, namely in the seamless realignment between producers and processors, as evidenced by a wide packer price margin as large as $67/CWT, according to recent data. But there are a couple of signs that it’s not time to rule out a spring rally in the cattle market; carcass weights are declining rapidly — steer weights have dropped 20 pounds in two weeks — and showlists are expected to decline in the next month. Both variables should increase packer demand as the beef sector works through supplies that were on the high side. Not only is the cattle cycle fundamentally shifting, it’s almost grilling season, a time that historically is bullish for consumer beef demand and consumption. And with more retailers and restaurants re-opening after the pandemic, there is growth potential in the food service sector, another key demand factor for beef. Don’t give up on a spring rally just yet. See more on the beef market situation.