Cattle started and ended the session under pressure but managed to trim losses somewhat during the middle of the week, but not enough to push cattle into the black. Heavy selling to close out the week has traders concerned that maybe cattle have topped, but the activity seemed to be more like chasing headlines.
The week started with cattle opening the session lower and remaining on the defense throughout the session, never crossing over to the plus side of the equation. Technical selling combined with profit taking to pressure cattle. Last week’s cattle performance was interesting in the fact that it was not in line with previous weeks (straight line up). The erratic performance is a sign of a potential topping action, which in the short term would not be surprising. Trouble with cattle, every break gets met with a new round of buying as everyone wants to own cattle.
Buying returned to the cattle market on Tuesday with support coming from bargain hunting. Cattle opened the session with small gains and waffled around to start the session but found good strength around midsession and rallied to end the day with solid gains in all contracts. Early selling was tied to demand concerns as China has not renewed export registrations for US beef plants and has recently placed a 10% tariff on all US imported beef. Show lists continue to dominate the cash trade right now, but traders are optimist cash will trade steady to higher with last week. Strong domestic demand and tight supplies continue to be the main driver. Technical buying was also evident as traders continue to buy cattle futures on any major break.
Wednesday’s session was a lot like Tuesday with cattle starting mixed but recovering from early selling pressure to push higher and close just shy of all time contracts highs. Early selling was tied to technical selling pressure as traders tried to clean up an extremely overbought market situation. But as has been the case, every break gets met with buyers and today was no exception. Support was also due to weather concerns as wintery weather is setting up over much of the Plains and Corn Belt. Tight supplies and the expectation that the tariff news will result in tighter supplies added support.
Cattle gapped lower on the open Thursday following the trend set by the other markets. But unlike the other markets, cattle started the day close to their lows. Selling was tied to the tariff announcement from Wednesday. But in this case tariffs are expected to be friendly cattle so what hit the market hard was the severe decline seen in the stock market and financial sector. Over 70% of red meat gets consumed in restaurants, so any hiccup in restaurant demand will result in a slowdown in domestic consumption. And that is the biggest fear in the beef industry today, demand destruction.
For the week, April live cattle were at $202.625 down $6.20. April feeder cattle closed at $279.425 down $7.50.
For the month, April live cattle were up $15.50. April feeder cattle closed up $12.675.
Cattle Weekly Comments April 4
Cattle Weekly Comments April 4
Cattle started and ended the session under pressure but managed to trim losses somewhat during the middle of the week, but not enough to push cattle into the black. Heavy selling to close out the week has traders concerned that maybe cattle have topped, but the activity seemed to be more like chasing headlines.
The week started with cattle opening the session lower and remaining on the defense throughout the session, never crossing over to the plus side of the equation. Technical selling combined with profit taking to pressure cattle. Last week’s cattle performance was interesting in the fact that it was not in line with previous weeks (straight line up). The erratic performance is a sign of a potential topping action, which in the short term would not be surprising. Trouble with cattle, every break gets met with a new round of buying as everyone wants to own cattle.
Buying returned to the cattle market on Tuesday with support coming from bargain hunting. Cattle opened the session with small gains and waffled around to start the session but found good strength around midsession and rallied to end the day with solid gains in all contracts. Early selling was tied to demand concerns as China has not renewed export registrations for US beef plants and has recently placed a 10% tariff on all US imported beef. Show lists continue to dominate the cash trade right now, but traders are optimist cash will trade steady to higher with last week. Strong domestic demand and tight supplies continue to be the main driver. Technical buying was also evident as traders continue to buy cattle futures on any major break.
Wednesday’s session was a lot like Tuesday with cattle starting mixed but recovering from early selling pressure to push higher and close just shy of all time contracts highs. Early selling was tied to technical selling pressure as traders tried to clean up an extremely overbought market situation. But as has been the case, every break gets met with buyers and today was no exception. Support was also due to weather concerns as wintery weather is setting up over much of the Plains and Corn Belt. Tight supplies and the expectation that the tariff news will result in tighter supplies added support.
Cattle gapped lower on the open Thursday following the trend set by the other markets. But unlike the other markets, cattle started the day close to their lows. Selling was tied to the tariff announcement from Wednesday. But in this case tariffs are expected to be friendly cattle so what hit the market hard was the severe decline seen in the stock market and financial sector. Over 70% of red meat gets consumed in restaurants, so any hiccup in restaurant demand will result in a slowdown in domestic consumption. And that is the biggest fear in the beef industry today, demand destruction.
For the week, April live cattle were at $202.625 down $6.20. April feeder cattle closed at $279.425 down $7.50.
For the month, April live cattle were up $15.50. April feeder cattle closed up $12.675.