Cattle started the week posting gains but then the wheels once again fell off the bus as cattle lost significant ground for the rest of the week ending Thursday. There really wasn’t any bearish news that entered the market to cause such a major selloff, just uncertainty on how the administration will handle Brazil and Mexico moving forward.
The week started with cattle gapping higher on Monday, extending gains early, but then fading through the early morning hours, but then found support about midsession and proceeded to rally into the close. Early support was due to technical buying as cattle bounce off major support in an attempt to clean up an oversold condition. Fundamentals remain strong as supplies remain tight and demand remains strong. Last week’s strong cash trade added support as cash bids improved from $230 earlier in the week to $232 to end the week. The market virtually ignored news that Mexico officials were coming to the US to meet with the Sec of Ag.
Heavy selling hit the cattle markets on Tuesday. After opening mixed cattle managed to shake off the early selling pressure and pushed to post gains early. Early support came from improving cash bids and tight supplies. By midsession cattle started to waffle due to comments from the Sec of Ag stating that she is willing to keep the border closed to Mexican cattle, but that Trump is pushing hard to get the border open in an attempt to lower cattle prices, due to increased supply. That was all the funds needed to turn to be aggressive sellers.
Losses were extended on Wednesday as cattle opened the session lower but quickly sold off to hit lock limit down early in the session. Support came from technical buying after seeing heavy losses on Tuesday. Expectations of a steady to firm cash trade added support. But cattle started to fade its gains just after midsession and then proceeded to extend session losses. The best example I have seen to describe the cattle market: Greed has been replaced with fear. Conflicting news out of Washington has the funds very nervous and looking for the door. The Sec of Ag is saying the border with Mexico will remain closed but followed that statement by saying Trump wants the border open. Uncertainty in trade, demand, and supply continues to push the funds out of long positions. Synthetics has Dec Live cattle trading about 50 to 75 cents lower while Nov feeder cattle are trading down another $3.00 to $3.50.
Fund long liquidation continued to pressure the cattle market Thursday. Early selling was tied to profit taking and the lingering uncertainty on trade, as well as on supply, and demand. Although there is little in the shape of new news to give cattle direction, the trade took the path of least resistance and faded lower. Sell stops and computer-generated sell orders added pressure. A lower cash market added the last bit of pressure for cattle.
For the week, Dec live cattle closed at $221.35 down $8.325. November feeder cattle closed at $326.40 down $12.475.
Cattle Weekly Comments November 7
Cattle Weekly Comments November 7
Cattle started the week posting gains but then the wheels once again fell off the bus as cattle lost significant ground for the rest of the week ending Thursday. There really wasn’t any bearish news that entered the market to cause such a major selloff, just uncertainty on how the administration will handle Brazil and Mexico moving forward.
The week started with cattle gapping higher on Monday, extending gains early, but then fading through the early morning hours, but then found support about midsession and proceeded to rally into the close. Early support was due to technical buying as cattle bounce off major support in an attempt to clean up an oversold condition. Fundamentals remain strong as supplies remain tight and demand remains strong. Last week’s strong cash trade added support as cash bids improved from $230 earlier in the week to $232 to end the week. The market virtually ignored news that Mexico officials were coming to the US to meet with the Sec of Ag.
Heavy selling hit the cattle markets on Tuesday. After opening mixed cattle managed to shake off the early selling pressure and pushed to post gains early. Early support came from improving cash bids and tight supplies. By midsession cattle started to waffle due to comments from the Sec of Ag stating that she is willing to keep the border closed to Mexican cattle, but that Trump is pushing hard to get the border open in an attempt to lower cattle prices, due to increased supply. That was all the funds needed to turn to be aggressive sellers.
Losses were extended on Wednesday as cattle opened the session lower but quickly sold off to hit lock limit down early in the session. Support came from technical buying after seeing heavy losses on Tuesday. Expectations of a steady to firm cash trade added support. But cattle started to fade its gains just after midsession and then proceeded to extend session losses. The best example I have seen to describe the cattle market: Greed has been replaced with fear. Conflicting news out of Washington has the funds very nervous and looking for the door. The Sec of Ag is saying the border with Mexico will remain closed but followed that statement by saying Trump wants the border open. Uncertainty in trade, demand, and supply continues to push the funds out of long positions. Synthetics has Dec Live cattle trading about 50 to 75 cents lower while Nov feeder cattle are trading down another $3.00 to $3.50.
Fund long liquidation continued to pressure the cattle market Thursday. Early selling was tied to profit taking and the lingering uncertainty on trade, as well as on supply, and demand. Although there is little in the shape of new news to give cattle direction, the trade took the path of least resistance and faded lower. Sell stops and computer-generated sell orders added pressure. A lower cash market added the last bit of pressure for cattle.
For the week, Dec live cattle closed at $221.35 down $8.325. November feeder cattle closed at $326.40 down $12.475.