Yippie, this party will will never end. (Please do not take that statement seriously.) — jtl
It’s a foregone conclusion fed cattle and boxed beef values will be higher this week, the debate is about how much higher. In order to fill normal slaughter schedules, packers must purchase more cattle than the last few weeks and will compete more aggressively in the negotiated cattle trade in spite of owning more forward contracted cattle than a year ago.
Winter weather is partly responsible for the up as it contributes to declining weights and lousy yields while forecasts for another bout of cold and snow this week show no immediate signs of reprieve.
Thoughts are widespread asking prices will be at $170 or higher. Boxed beef prices are increasing but are, as is typical, lagging the strong live prices. But with beef production last week clocking in 12% below the same week a year ago, the pipeline is empty and the choice cutout is expected to return to $255 level over the next several days, with grinds and ends leading the charge. It remains to be seen how food service and retail beef demand develops this month but the extra money in every vehicle owner’s pocket won’t hurt and will likely help.
Cattle Futures Take Out Last Week’s Highs
CME cattle futures handily took out last week’s highs early this morning with feeders back in the lead. Interestingly, Jan FC gapped higher, impressively clearing the 100-day moving average and so far leaving a gap on the way back up in the same area as one left on the big down. It’s a chart formation that will garner some of attention and will be watched closely. If it holds on Friday, the technical implications would be positive. The cash feeder index has rebounded to the $228 area and talk is a push to $230 is on tap while Jan FC posted a $226.35 high so far today.
For live cattle futures a positive was the 3,747 contract increase in live cattle futures open interest on Friday’s rally, even during a holiday week. With the holidays finally behind us, LC futures focus will be the degree of momentum of cash fed cattle prices over the next 4 weeks, as traders attempt to gauge if prices can reestablish in the +$170 area.
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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.