Cattle opened the week on the defense posting heavy losses right out of the gate, but then successfully dug their way out of the hole during the next three sessions to post small gains by the end of the week Thursday.
The week started with cattle gapping lower on the opening bell. Live cattle tried to stage a slight recovery early, which failed late in the session, but feeder cattle just continued to expand session losses. Early selling was tied to the announcement that USDA was going to slowly start to reopen the border with Mexico. Traders heard the words border opening and came out as heavy sellers. It is hard to say just what the results will be with the border reopening, but it did not warrant feeders dropping limit in the deferred contracts. The border will not open for the next 30 days, and it will start in AZ and slowly work its way east. Losses should have been under control with the heavy sell-off seen in the crude oil and higher stock market, but it just goes to show, when it’s risk off in the ag sector, it hits all markets. Support from Friday’s mostly friendly USDA reports should have helped offset the sting from the border news, but again all the traders heard was border opening,
Buying returned to the cattle market on Tuesday as cattle opened the session higher in both contracts. Early support came from technical buying and bargain hunting. Cattle ignored Friday’s reports as most months went into melt down mode from the news of USDA opening the border with Mexico. All three of Friday’s reports were friendly cattle, but they were overshadowed by the news USDA will start to slowly open ports between the US and Mexico, starting with Douglas AZ, which is the furthest west of the current infestation. Drought concerns added support to the cattle market as traders are starting to be concerned that producers might have to start pulling cattle off pastures and begin liquidating herds again as pastures start to dry up. Gains were kept in check by reports of cash offers at $228, $2 to $3 below last week. A lower crude oil market and higher Dow added support to cattle.
Buying slowed down midweek, but cattle still managed to post small gains. Cattle opened the session with small gains but managed to extend session gains throughout the morning. Technical buying helped cattle bounce off support. Support was also due to expectations that the Fed would leave interest rates unchanged, but it was impressive that cattle held gains with crude trading sharply higher and the Dow lower. Limited cash activity has taken place this week at $228. A lower corn market added support to feeder cattle.
Solid gains continued to see buying to close out the week. Cattle opened Thursday’s session higher in both contracts but switched to trade mixed with live cattle holding gains while feeder cattle traded on both sides of the fence early in the session but then firmed to trade with solid gains in the second half of the day. Early support was due to reports of cash activity taking place at $235. Technical buying added support as cattle continue to try and correct an oversold market condition and bring futures more in line with cash. A late surge in feeder cattle was supported by a weaker corn market. Last week’s beef export sales pace was estimated at 15,109 MT, which was a 5-week high.
As of July 26, pasture and range conditions were estimated at 29% g/e, 29% fair, and 42% p/vp, unchanged from the previous week.
For the week, Aug closed at $231.75 up $4.675. Aug feeder cattle closed at $348.025 up $2.70.
For the month, Aug closed down $10.675. Aug feeder cattle closed down $16.575.
Cattle Weekly Comments July 31
Cattle Weekly Comments July 31
Cattle opened the week on the defense posting heavy losses right out of the gate, but then successfully dug their way out of the hole during the next three sessions to post small gains by the end of the week Thursday.
The week started with cattle gapping lower on the opening bell. Live cattle tried to stage a slight recovery early, which failed late in the session, but feeder cattle just continued to expand session losses. Early selling was tied to the announcement that USDA was going to slowly start to reopen the border with Mexico. Traders heard the words border opening and came out as heavy sellers. It is hard to say just what the results will be with the border reopening, but it did not warrant feeders dropping limit in the deferred contracts. The border will not open for the next 30 days, and it will start in AZ and slowly work its way east. Losses should have been under control with the heavy sell-off seen in the crude oil and higher stock market, but it just goes to show, when it’s risk off in the ag sector, it hits all markets. Support from Friday’s mostly friendly USDA reports should have helped offset the sting from the border news, but again all the traders heard was border opening,
Buying returned to the cattle market on Tuesday as cattle opened the session higher in both contracts. Early support came from technical buying and bargain hunting. Cattle ignored Friday’s reports as most months went into melt down mode from the news of USDA opening the border with Mexico. All three of Friday’s reports were friendly cattle, but they were overshadowed by the news USDA will start to slowly open ports between the US and Mexico, starting with Douglas AZ, which is the furthest west of the current infestation. Drought concerns added support to the cattle market as traders are starting to be concerned that producers might have to start pulling cattle off pastures and begin liquidating herds again as pastures start to dry up. Gains were kept in check by reports of cash offers at $228, $2 to $3 below last week. A lower crude oil market and higher Dow added support to cattle.
Buying slowed down midweek, but cattle still managed to post small gains. Cattle opened the session with small gains but managed to extend session gains throughout the morning. Technical buying helped cattle bounce off support. Support was also due to expectations that the Fed would leave interest rates unchanged, but it was impressive that cattle held gains with crude trading sharply higher and the Dow lower. Limited cash activity has taken place this week at $228. A lower corn market added support to feeder cattle.
Solid gains continued to see buying to close out the week. Cattle opened Thursday’s session higher in both contracts but switched to trade mixed with live cattle holding gains while feeder cattle traded on both sides of the fence early in the session but then firmed to trade with solid gains in the second half of the day. Early support was due to reports of cash activity taking place at $235. Technical buying added support as cattle continue to try and correct an oversold market condition and bring futures more in line with cash. A late surge in feeder cattle was supported by a weaker corn market. Last week’s beef export sales pace was estimated at 15,109 MT, which was a 5-week high.
As of July 26, pasture and range conditions were estimated at 29% g/e, 29% fair, and 42% p/vp, unchanged from the previous week.
For the week, Aug closed at $231.75 up $4.675. Aug feeder cattle closed at $348.025 up $2.70.
For the month, Aug closed down $10.675. Aug feeder cattle closed down $16.575.