Enthusiasm for Cattle Rally Muted So Far

From The Beef By Cassie Fish, CassandraFish.com

A Handbook for Ranch ManagersDespite some positive technical signs, enthusiasm seems to be running low for much of a rally in CME cattle futures. Feb and Apr LC have both taken out Monday’s high and have even poked their heads above the 10-day moving average. But it’s where we finish today rather than where we start that will give market watchers some additional clarity.Most active April LC is still shy of a .318% retracement back to $152.80. But on thepositive front, the bull spreads are working as Feb LC seems to have remembered first notice day is coming up on February 9 and perhaps cash prices won’t trade sub-$150 during February after all. Still, last week’s high of $154.95 looms overhead as significant resistance, psychologically and technically.Planned Grazing: A Study Guide and Reference Manual

Boxes, How Much Lower?

It’s somewhat amusing the bears want to talk about the declining boxed beef prices as bearish when the market dramatically ignored all-time highs being made in boxed beef prices just a couple of weeks ago.So where are boxes headed? Yesterday choice boxes were quoted at $247.70 off about 7% from the high and it’s widely expected to lose another $3-4 this week. Support can be found where the USDA choice heavy cutout bottomed in December at $238.57 just above the big low made in September of $237.66. Prior to that you have to look way back to early June when the cutout was trading in the low $230s. We won’t know until Monday if the comprehensive cutout is going to narrow its $4/cwt gap to the spot cutout, or lag behind padding packers pockets.

         Packers Play It Cool

Environmental & Natural Resource Economics: The Austrian ViewPackers are expected to rely very heavily on February contracts for next week’s slaughter, enticed by a bonanza basis and the ability to leverage captive supplies against the negotiated buy for this week, which so far, hasn’t yielded much trade. As futures recover, packers are playing it cool and cash trade may not occur this week until Friday afternoon. Last week’s cash average was $159.44 so the basis has narrowed into less than $6 after stretching over $10 on Monday.       

Cash Trade This Week Could Get Interesting

Combat Shooter's HandbookCash is expected to trade lower this week, perhaps seeking the levels traded in September and December, $156.74 and $158.51 respectively. The monumental difference this time, compared to September and December are packer margins. Market ready supplies of fed cattle are arguably more current today than during those earlier time frames as well. Which is why slaughter levels over the next 5 weeks are extremely critical in setting the tone of this market as we round the turn into spring. If cash were to end up trading steady this week, let alone higher, that would be an interesting development.    

Beef Export Discussion on Tap for Tomorrow

The Betrayed: On Warriors, Cowboys and Other MisfitsIf you’ve got some time tomorrow afternoon and want to be up to speed on the beef exports outlook for 2015, sign up to listen to USMEF economist Erin Borrer.  Click here for more information.

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1) The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3)

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.
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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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