Cattle put in a sloppy weekly performance this short week as it appeared traders were chasing headlines. Live cattle lost ground at the start of the week and close of the week, posting gains only in the middle of the short week ending Thursday. Feeder cattle on the other hand traded sharply higher to start the short week but then faded the gains the rest of the week.
Cattle started the short week with live cattle posting small losses while feeder cattle pushed to post sharp gains. Tuesday’s session appeared to chase headlines with feeders seeing strong buying support from reports of another new world screw worm outbreak in northern Mexico. Traders were expecting USDA to shut down the border, which would further tighten up feeder cattle supplies. The lack of a cash trade kept the live cattle on the defense. Last week’s cash trade took place around $203.
Wednesday’s session also had cattle trading in opposite directions. Cattle opened the session steady to firm and then each contract went its own way, live cattle pushing higher while feeder cattle sold off. Early action was an attempt to correct what might have been an overreaction to market direction on Tuesday. The knee jerk reaction to reports of a new outbreak of the new world screw worm in Mexico had rumors flying that the border would be closed, but USDA reported that the border would not be closed and that they would let the protocols work. Which resulted in traders pulling premium back out of the feeder cattle market. Live cattle were support by the fact they are undervalued when compared to feeder cattle.
To close out the short week, both cattle contracts lost ground on Thursday. Selling was tied to profit taking. Cattle look tired and appear to be ready to stage a retracement, but the strong cash market is preventing cattle from breaking too much. At this point, until something comes along to break cattle out of its established trading range, cattle will waffle around. Live cattle were pressured Thursday by the lack of a cash trade. A stronger grain complex added pressure to the feeder cattle. Position squaring ahead of Friday’s COF report was also evident.
USDA’s Feb COF report was neutral to friendly cattle as most estimates were close to expectations. On feed was as expected but placements were below expectations, which in turn resulted in marketing to be below expectations. Report estimates are On Feed: 99% (as expected), Placed: 102% (1% below expectations), and Marketed: 101% (1% below expectations).
For the week, Feb live cattle were at $197.825 up 7.5 cents, while March feeder cattle were at $267.95 up $1.60.
Cattle Weekly Comments February 21
Cattle Weekly Comments February 21
Cattle put in a sloppy weekly performance this short week as it appeared traders were chasing headlines. Live cattle lost ground at the start of the week and close of the week, posting gains only in the middle of the short week ending Thursday. Feeder cattle on the other hand traded sharply higher to start the short week but then faded the gains the rest of the week.
Cattle started the short week with live cattle posting small losses while feeder cattle pushed to post sharp gains. Tuesday’s session appeared to chase headlines with feeders seeing strong buying support from reports of another new world screw worm outbreak in northern Mexico. Traders were expecting USDA to shut down the border, which would further tighten up feeder cattle supplies. The lack of a cash trade kept the live cattle on the defense. Last week’s cash trade took place around $203.
Wednesday’s session also had cattle trading in opposite directions. Cattle opened the session steady to firm and then each contract went its own way, live cattle pushing higher while feeder cattle sold off. Early action was an attempt to correct what might have been an overreaction to market direction on Tuesday. The knee jerk reaction to reports of a new outbreak of the new world screw worm in Mexico had rumors flying that the border would be closed, but USDA reported that the border would not be closed and that they would let the protocols work. Which resulted in traders pulling premium back out of the feeder cattle market. Live cattle were support by the fact they are undervalued when compared to feeder cattle.
To close out the short week, both cattle contracts lost ground on Thursday. Selling was tied to profit taking. Cattle look tired and appear to be ready to stage a retracement, but the strong cash market is preventing cattle from breaking too much. At this point, until something comes along to break cattle out of its established trading range, cattle will waffle around. Live cattle were pressured Thursday by the lack of a cash trade. A stronger grain complex added pressure to the feeder cattle. Position squaring ahead of Friday’s COF report was also evident.
USDA’s Feb COF report was neutral to friendly cattle as most estimates were close to expectations. On feed was as expected but placements were below expectations, which in turn resulted in marketing to be below expectations. Report estimates are On Feed: 99% (as expected), Placed: 102% (1% below expectations), and Marketed: 101% (1% below expectations).
For the week, Feb live cattle were at $197.825 up 7.5 cents, while March feeder cattle were at $267.95 up $1.60.