Cattle put in a rough week this week. Live cattle were under heavy pressure for 4 out of the 5 sessions while feeder cattle saw heavy selling in three of the five sessions. Feeders took the biggest hit, closing limit down on Thursday and testing their expanded limit level on Friday. Fundamentally nothing has changed to create the heavy selloff. Technically cattle market looks to be in trouble.
Cattle started the week with gains but then switched to trade mixed for most of the session. Live cattle were supported by a stronger cash trade while feeder cattle were pressured by the strong grain complex. Live cattle were also supported by reports that China did in fact renew 425 processing plant export licenses. News that Australia and Brazil have about reached their low tariff beef export quota to China added support as once the quota is reached, US beef will become price competitive. Cattle slipped lower into the close due to spill over pressure from the lower feeder cattle market and higher grains. The lack of a cash trade added pressure.
Tuesday session was cattle post small gains with technical buying and expectations for another week of strong cash activity added support to the live cattle. Feeder cattle were supported by a softer grains complex. The front month June live cattle and May feeder cattle contracts are tied to cash and will respond as cash behaves. Last week’s cash took place between $260 and $265.
Selling returned to the cattle midweek. Cattle opened steady to higher but reversed to trade in the red for most of the session. Selling continued to influence the live cattle while a buying surge late in the session helped feeder cattle push to end in the black. Early support for the live cattle came from a higher cash trade. A lower grain market supported feeder cattle. Light selling was tied to reports that the Teamsters voted to strike Cargill’s Fort Morgan beef plant. Cargill in turn locked the workers out. A light cash was reported to take place between $264, up $2 from last week.
Heavy selling returned to the cattle markets on Thursday. Cattle opened the session mixed with live cattle higher while feeder cattle were lower. A firmer cash trade supported live cattle early. Feeder cattle saw technical selling. A light cash trade was reported taking place yesterday between $264, up $2 from last week. Selling moved into the cattle markets around midsession and increased rapidly as computer generated sell stops were triggered accelerating the losses. Thursday seemed to be more about technical signals than fundamental. Position squaring ahead of Friday’s COF report was also evident.
The May COF report was slightly bearish cattle as all of the numbers were slightly off expectations. The report showed more cattle in feedlots than expected, higher number being placed in feedlots than expected, and lower marketings than expected. The numbers for the report are: On Feed: 102% (1% above expectations), Placed: 106% (3% above expectations), and Marketed: 90% (1% below expectations).
As of May 17, pasture and range conditions were rated at 28% g/e, 28% fair and 44% p/vp, down 3% from last year.
For the week, June live cattle closed at $249.30 down $4.60. May feeder cattle closed at $369.125 up 45 cents while Aug feeder cattle closed at $349.85 down $11.60.
Cattle Weekly Comments May 22
Cattle Weekly Comments May 22
Cattle put in a rough week this week. Live cattle were under heavy pressure for 4 out of the 5 sessions while feeder cattle saw heavy selling in three of the five sessions. Feeders took the biggest hit, closing limit down on Thursday and testing their expanded limit level on Friday. Fundamentally nothing has changed to create the heavy selloff. Technically cattle market looks to be in trouble.
Cattle started the week with gains but then switched to trade mixed for most of the session. Live cattle were supported by a stronger cash trade while feeder cattle were pressured by the strong grain complex. Live cattle were also supported by reports that China did in fact renew 425 processing plant export licenses. News that Australia and Brazil have about reached their low tariff beef export quota to China added support as once the quota is reached, US beef will become price competitive. Cattle slipped lower into the close due to spill over pressure from the lower feeder cattle market and higher grains. The lack of a cash trade added pressure.
Tuesday session was cattle post small gains with technical buying and expectations for another week of strong cash activity added support to the live cattle. Feeder cattle were supported by a softer grains complex. The front month June live cattle and May feeder cattle contracts are tied to cash and will respond as cash behaves. Last week’s cash took place between $260 and $265.
Selling returned to the cattle midweek. Cattle opened steady to higher but reversed to trade in the red for most of the session. Selling continued to influence the live cattle while a buying surge late in the session helped feeder cattle push to end in the black. Early support for the live cattle came from a higher cash trade. A lower grain market supported feeder cattle. Light selling was tied to reports that the Teamsters voted to strike Cargill’s Fort Morgan beef plant. Cargill in turn locked the workers out. A light cash was reported to take place between $264, up $2 from last week.
Heavy selling returned to the cattle markets on Thursday. Cattle opened the session mixed with live cattle higher while feeder cattle were lower. A firmer cash trade supported live cattle early. Feeder cattle saw technical selling. A light cash trade was reported taking place yesterday between $264, up $2 from last week. Selling moved into the cattle markets around midsession and increased rapidly as computer generated sell stops were triggered accelerating the losses. Thursday seemed to be more about technical signals than fundamental. Position squaring ahead of Friday’s COF report was also evident.
The May COF report was slightly bearish cattle as all of the numbers were slightly off expectations. The report showed more cattle in feedlots than expected, higher number being placed in feedlots than expected, and lower marketings than expected. The numbers for the report are: On Feed: 102% (1% above expectations), Placed: 106% (3% above expectations), and Marketed: 90% (1% below expectations).
As of May 17, pasture and range conditions were rated at 28% g/e, 28% fair and 44% p/vp, down 3% from last year.
For the week, June live cattle closed at $249.30 down $4.60. May feeder cattle closed at $369.125 up 45 cents while Aug feeder cattle closed at $349.85 down $11.60.