Cattle posted gains in every session this week. Early support came from what traders’ thought was to give the market a bit of a new world screwworm premium. The realization that the pest will not impact food quality but instead result in an increase in producer cost and labor helped support the cattle market. Futures discount to cash added to support. Tight supplies and strong demand continue to add support.
Cattle opened the week higher and near session lows and continued to expand gains throughout the session. Early support came from news that the New World Screwworm count has increased to 12 confirmed cases. Lower crude oil combined with the Dow trading to new highs all added support. Light support was due to movement restriction and supply concerns as the cases of screw worm increase. Live cattle were supported by a better-than-expected cash trade that developed late Friday. Cash traded between $257 and $258, steady with last week.
Tuesday’s session had cattle opening mixed with live cattle steady while feeder cattle were lower. It did not take long for cattle to brush off the early selling pressure and turn higher, extending session gains throughout the session. Cattle did show signs of a lower opening as it appears that all of the ag markets would see a risk off session. But just the opposite occurred. Tight supplies and futures discount to cash helped give cattle support. A lower crude oil market added support as energy was one of the largest contributors to inflation and now with crude on the defense and energy prices decreasing, it is likely inflation will slow, which will help prevent the Fed from having to increase interest rates.
The cattle market’s sharp gains slowed midweek as now that cash and futures have merged, the markets have taken a back seat and are waiting for news to push traders in a direction. By the close, live cattle saw small gains in the soon to expire front month June but double-digit losses in the deferred months. Feeder cattle closed with small double-digit gains in all months. Both cattle contracts have posted strong gains in the past two sessions which have drastically reduced futures discount to cash. So, the session seemed to be a bit quieter as traders wait to see what cash does this week. Earlier in the week cash traded between $257 and $258, steady with last week. Light activity was focused on position squaring ahead of Thursday’s COF report.
The June COF report was bullish cattle as all three categories came in below expectations. The numbers for the report were: On Feed: 102% (1% below expectations), Placed: 90% (4% below expectations), and Marketing: 88% (1% below expectations). The Market estimate was the second lowest report for May since the series started in 1996.
As of June 14, pasture and range conditions were rated at 32% g/e, 29% fair and 39% p/vp, up 1% from last week.
For the week, June live cattle closed at $254.80 up $4.925. Aug feeder cattle closed at $366.60 up $9.175.
Cattle Weekly Comments June 18
Cattle Weekly Comments June 18
Cattle posted gains in every session this week. Early support came from what traders’ thought was to give the market a bit of a new world screwworm premium. The realization that the pest will not impact food quality but instead result in an increase in producer cost and labor helped support the cattle market. Futures discount to cash added to support. Tight supplies and strong demand continue to add support.
Cattle opened the week higher and near session lows and continued to expand gains throughout the session. Early support came from news that the New World Screwworm count has increased to 12 confirmed cases. Lower crude oil combined with the Dow trading to new highs all added support. Light support was due to movement restriction and supply concerns as the cases of screw worm increase. Live cattle were supported by a better-than-expected cash trade that developed late Friday. Cash traded between $257 and $258, steady with last week.
Tuesday’s session had cattle opening mixed with live cattle steady while feeder cattle were lower. It did not take long for cattle to brush off the early selling pressure and turn higher, extending session gains throughout the session. Cattle did show signs of a lower opening as it appears that all of the ag markets would see a risk off session. But just the opposite occurred. Tight supplies and futures discount to cash helped give cattle support. A lower crude oil market added support as energy was one of the largest contributors to inflation and now with crude on the defense and energy prices decreasing, it is likely inflation will slow, which will help prevent the Fed from having to increase interest rates.
The cattle market’s sharp gains slowed midweek as now that cash and futures have merged, the markets have taken a back seat and are waiting for news to push traders in a direction. By the close, live cattle saw small gains in the soon to expire front month June but double-digit losses in the deferred months. Feeder cattle closed with small double-digit gains in all months. Both cattle contracts have posted strong gains in the past two sessions which have drastically reduced futures discount to cash. So, the session seemed to be a bit quieter as traders wait to see what cash does this week. Earlier in the week cash traded between $257 and $258, steady with last week. Light activity was focused on position squaring ahead of Thursday’s COF report.
The June COF report was bullish cattle as all three categories came in below expectations. The numbers for the report were: On Feed: 102% (1% below expectations), Placed: 90% (4% below expectations), and Marketing: 88% (1% below expectations). The Market estimate was the second lowest report for May since the series started in 1996.
As of June 14, pasture and range conditions were rated at 32% g/e, 29% fair and 39% p/vp, up 1% from last week.
For the week, June live cattle closed at $254.80 up $4.925. Aug feeder cattle closed at $366.60 up $9.175.