Cattle continue to defy the rules as the almost year long bull run remains intact. The front month August contracts traded with gains this week just to stay in sync with cash while the deferred months were strong due to the fourth verse of the same song.
At this point there are no technical signals or chart formations that can help define when this rally will end. We are trading in extremely uncharted territory and any price point of when the rally will end at this point is purely a guess. This rally will likely end when fundamentals change. And at this point that does not appear to be anytime soon.
Cattle opened the week steady to firm but spent the first half of the session trading in the red in what looked like was going to be a profit taking session. But in true cattle fashion, every retracement gets met with buying and that rang true again. Once cattle traded to minor support, buy orders were triggered pushing the cattle market higher and into buy stops which helped accelerate the gains. Live cattle gains were kept in check by the lack of a cash trade. Last week’s cash activity took place at steady money, $243 to $245. The US and Mexico have protocols in place to combat the new screw worm, but the infrastructure looks like it won’t be in place for another year. So, the question remains, will the boarder remain closed as well.
A little quieter session developed on Tuesday with live cattle posting small gains while feeder cattle posted small triple digit gains. Cattle opened the session sloppy and appeared to be set to see a lower performance. But like Monday, cattle found strength and pushed higher with tight supplies bringing most of the gains to the feeder cattle market. Live cattle struggled due to the lack of a cash trade.
Strong gains were seen in the cattle markets on Wednesday as all of the live cattle contracts (except for Aug) and all of the feeder cattle contracts surged to post another round of new all-time highs. Strong demand, futures discount to cash, and tight supplies continue to drive the market. The lack of a cash trade limited the gains in the live cattle market as packers were processing contract cattle. Boxed beef prices continue to push higher as retail level stores stock up for the last three-day holiday of the summer.
Cattle saw an extremely subdued session on Thursday with most of the activity focused on position squaring ahead of Friday’s COF report. The front months have become tied to cash as live cattle contract is set to expire Aug 29 while the Aug feeder cattle contract is set to go off the board Aug 28. Live cattle started the session mixed and continued to trade in a back-and-forth fashion throughout the session. Feeder cattle started out higher but faded their gains only to recover to end the mixed session. The lack of a cash trade pressured live cattle. A stronger grain complex pressured the feeder cattle.
The COF report was close to expectations on most of the estimates, but a little higher on placements. This would be considered to be neutral to a bit negative cattle, especially feeder cattle and further out live cattle months. Estimates for the report are On Feed: 98% (as expected), Placements: 94% (3% above expectations), and Marketing at 94% (as expected).
As of Aug 17, pasture and range conditions were estimated at 39% g/e, 30% fair, and 31% p/vp, unchanged from last week.
For the week, August live cattle closed at $239.95 up $3.70. August feeder cattle closed at $360.35 up $14.20.
Cattle Weekly Comments August 22
Cattle Weekly Comments August 22
Cattle continue to defy the rules as the almost year long bull run remains intact. The front month August contracts traded with gains this week just to stay in sync with cash while the deferred months were strong due to the fourth verse of the same song.
At this point there are no technical signals or chart formations that can help define when this rally will end. We are trading in extremely uncharted territory and any price point of when the rally will end at this point is purely a guess. This rally will likely end when fundamentals change. And at this point that does not appear to be anytime soon.
Cattle opened the week steady to firm but spent the first half of the session trading in the red in what looked like was going to be a profit taking session. But in true cattle fashion, every retracement gets met with buying and that rang true again. Once cattle traded to minor support, buy orders were triggered pushing the cattle market higher and into buy stops which helped accelerate the gains. Live cattle gains were kept in check by the lack of a cash trade. Last week’s cash activity took place at steady money, $243 to $245. The US and Mexico have protocols in place to combat the new screw worm, but the infrastructure looks like it won’t be in place for another year. So, the question remains, will the boarder remain closed as well.
A little quieter session developed on Tuesday with live cattle posting small gains while feeder cattle posted small triple digit gains. Cattle opened the session sloppy and appeared to be set to see a lower performance. But like Monday, cattle found strength and pushed higher with tight supplies bringing most of the gains to the feeder cattle market. Live cattle struggled due to the lack of a cash trade.
Strong gains were seen in the cattle markets on Wednesday as all of the live cattle contracts (except for Aug) and all of the feeder cattle contracts surged to post another round of new all-time highs. Strong demand, futures discount to cash, and tight supplies continue to drive the market. The lack of a cash trade limited the gains in the live cattle market as packers were processing contract cattle. Boxed beef prices continue to push higher as retail level stores stock up for the last three-day holiday of the summer.
Cattle saw an extremely subdued session on Thursday with most of the activity focused on position squaring ahead of Friday’s COF report. The front months have become tied to cash as live cattle contract is set to expire Aug 29 while the Aug feeder cattle contract is set to go off the board Aug 28. Live cattle started the session mixed and continued to trade in a back-and-forth fashion throughout the session. Feeder cattle started out higher but faded their gains only to recover to end the mixed session. The lack of a cash trade pressured live cattle. A stronger grain complex pressured the feeder cattle.
The COF report was close to expectations on most of the estimates, but a little higher on placements. This would be considered to be neutral to a bit negative cattle, especially feeder cattle and further out live cattle months. Estimates for the report are On Feed: 98% (as expected), Placements: 94% (3% above expectations), and Marketing at 94% (as expected).
As of Aug 17, pasture and range conditions were estimated at 39% g/e, 30% fair, and 31% p/vp, unchanged from last week.
For the week, August live cattle closed at $239.95 up $3.70. August feeder cattle closed at $360.35 up $14.20.