Cattle Weekly Comments March 28

Cattle Weekly Comments March 28

Cattle did not have a good week this week. Cattle opened the week on the defense with most of the selling spilling over from USDA’s negative March COF report. The report showed a much larger than expected placement estimate, which pressured both the live cattle feeder cattle markets. This was followed up by news that health department officials are investigating HPAI impacts on dairy herds in the Southern Plains. In a nutshell, this week was more about reaction to the news than about trading fundamentals.

Cattle started the week lower with early selling tied to Friday’s negative COF report. Light selling was tied to pressure from a stronger grain complex. Live cattle’s losses were kept in check by last week’s record setting cash trade. Cash activity was reported a record $190 to $191, up $2 to $3 from the previous week. Feeder cattle are trying to stay in line with the cash feeder cattle index, which is now at $251.81. Losses were trimmed late by weather concerns and from the realization that supplies of cattle are going to remain tight for a while yet.

Selling continued to drive the cattle market on Tuesday. After opening the session mixed live turned cattle lower while the feeder cattle market was higher. Both markets tried to rally early, but both ran into technical selling which pushed both cattle contracts into the red. Light selling could have been tied to the news story about the health department officials investigating HPAI impacted dairy herds in the Southern Plains. Sell stops were triggered once cattle broke through major support, accelerating the sell off. Early losses were kept in check by yesterday’s friendly Cold Storage report, which put beef in freezers at 442.75 million pounds vs 471.26 million last month and 500.79 million last year. Feeder cattle started the session off with gains due to support from a lower grain complex, but once the live cattle market faded, so did feeders. Friday’s negative COF report continues to add pressure. Feeder cattle are trying to stay in line with the cash feeder cattle index, which is now at $251.70.

Buying started the show up midweek with cattle seeing support from the thought that traders needed to correct yesterday’s knee jerk reaction to the news story about the health department officials investigating HPAI impacted dairy herds in the Southern Plains. Technical buying was also a factor as most months traded down to major support. Live cattle gains were kept in check by the lack of a cash trade. Feeder cattle closed with solid gains due to support from a weaker corn market. Feeder cattle are trying to stay in line with the cash feeder cattle index, which is now at $251.63.

For the week, April closed at $185.00 down $2.50. March feeder cattle went off the board at $247.75 down $2.20 while April feeder cattle were at $247.125 down $4.375.

For the month, April closed down 35 cents. March feeder cattle were down $1.25 while April feeder cattle were down $6.60.

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