from CassandraFish.comBy Cassie Fish,
It’s supposed to be a quiet holiday trade, but no one told Jan feeder cattle futures, where the action this morning resembles an express elevator ride with only a down button.
Surprising even bears, Jan has taken out last week’s lows handily, demonstrating that feeder cattle have uncoupled from fed cattle, since cash fed cattle prices traded $4-5 higher 2 days ago and the first 3 months of live cattle futures are modestly higher on the day.
There’s no bearish fundamental news in feeder futures, only extremely light volume, poor liquidity and obviously some worn-out longs deciding enough is enough and heading for the door. It is the market action itself that is disturbing to bulls and casting a sense of unease over the entire cattle complex in spite of Wednesday’s stellar cash cattle trade.
Fats and Boxes Put on Money
All major packers participated and cash prices bids rose quickly. From last week’s “worst” of $156 to this week’s “best” of $164 it’s been quite a ride in the fed cattle market. Boxed beef values have more than found their legs and put on a quick $5 bucks or so with more to come. This week’s kill is estimated at 400k while next week could come in 465-475k.
A shot of sharply below normal cold air will push down as far as the northern Texas panhandle next week. Cattle in some feedyards in Nebraska and Iowa are showing signs of enduring less than ideal winter weather feeding conditions for the first time in what seems like a long time.
Setting the Tone for 2015
As we round the final turn into 2015, there is a mixed bag of fundamental and technical indicators for traders to sort through. A sustainable downtrend is unlikely, but taking the opportunity to get front-end fed cattle supplies cleaned up in January when packers resume full kill weeks and the beef pipeline is refilled is none short of critical. Getting “cleaned-up” will go further to setting a positive tone for 2015 than anything will. Clean up coupled with some brisk beef demand into Super Bowl weekend and the fed cattle market can stay on firm footing for months to come.
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.
The Essence of Liberty Volume I: Liberty and History chronicles the rise and fall of the noble experiment with constitutionally limited government. It features the ideas and opinions of some of the world’s foremost contemporary constitutional scholars. This is history that you were not taught at the mandatory government propaganda camps otherwise known as “public schools.” You will gain a clear understanding of how America’s decline and decay is really nothing new and how it began almost immediately with the constitution. Available in both paperback and Kindle versions.
You might be interested in the other two volumes of this three volume setA: The Essence of Liberty Volume II: The Economics of Liberty and The Essence of Liberty Volume III: Liberty: A Universal Political Ethic.