Feeder cattle futures are trading above last week’s lows, but the weakness displayed yesterday is being followed by new lows for this holiday week today. Live cattle futures did break in sympathy with feeders, before turning higher on the day and making a new high for the week as the cash fed cattle market begins to heat up.
Fed Cattle Trade Trading at Higher Money
At this writing, live cattle futures are rallying buoyed by reports of a $162 trade in Kansas to a major packer. That price is $2 higher than last week’s highest trade and $6 higher than last week’s worst. With boxed beef values putting on money by dollars, this week’s kill is now expected to be 400,000-410,000 head range as packers will run some plants Saturday now that margins are greatly improved. Fed prices could trade even higher yet today.
Feeder Futures Can’t Shake Off Worries
There aren’t any cash feeder cattle sales over these 2 holiday weeks and the last weekly index reported is around $225, about $10 higher than spot Jan. But feeder futures are intent on reflecting the worries that have crept into cattle industry mindset since the sobering December break. Optimism has drained away now that corn prices are surprising many by comfortably trading above $4. To top that off, fed cattle breakevens for the first 4 months of 2015 loom in the $160s-170s range. After a year or record profitability for the cattle feeding sector, the possibility of red ink has tempered the shortage of feeder cattle supplies and cast a bearish tone over that market.
The source of bullish news the next few weeks will be the cash fed cattle and boxed beef markets as the cash sets the tone for futures. Look for the bull spreads to work in LC and LC to gain on FC- both a reflection of the growing belief that this bull market has seen the majority of its best days. With the market structure back to a realizing bull, we’ll see where this cash market will take us.
Happy Holidays to Our Readers
Here’s wishing each of you a joyous holiday. Thank you for your readership!
The Beef is published by Consolidated Beef Producers…for more info click here.
Disclaimer: The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.
Combat Shooter’s Handbook. Call for a pizza, a cop, and an ambulance and see which one arrives first. So, who does that leave to protect you, your life, property and family? The one and only answer is: YOU This Handbook is intended to help you exercise that right and meet that responsibility. Available in both paperback and Kindle versions.