The cattle markets are showing signs of topping out, or at least taking a breather after the recent rally. With some indications that the commodity funds are liquidating, or at least not adding to their long cattle positions, the market could be in for a rough patch. For the week ended Tuesday, April Live Cattle futures were up 22 cents, with the June contract down $1.25 and August off $1.27. The Cattle on Feed report last Friday was a non-event, with the major categories all falling near pre-report expectations. Total cattle on feed on March 1 were at 97 percent of last year, with placements at 99 percent and marketing at 102 percent of 2009. Boxed beef cutout values were sharply higher, helping offset the reduced fund presence. Choice cutouts were up $8.89 for the week, with the Select up $9.03. The Choice/Select spread remains very narrow, at less than a two dollar premium for Choice. Last week’s cash fed cattle trade was stronger, with a wide range of prices from $95 to $98 in light trade late Friday afternoon. That was up about three bucks compared to the previous week. There has already been significant cash trade on Tuesday of this week, with prices mostly a dollar or so lower.
Feeder Cattle futures were sharply higher this week, even after sharp selloffs on Monday and Tuesday. The March futures contract was up $2.42 compared to last Tuesday, with the April up $1.20 and October up 95 cents. Cash feeder auctions are mixed in early week trade, with weather limiting runs in some areas, while some feeder buyers are being cautious about the approaching mid-week storm.
Hog values were mixed this week, with Lean Hog futures mostly higher. The April contract gained 17 cents for the week, while the May was up $1.05 and June gained 95 cents. Cash butchers in Sioux Falls were steady with last Tuesday at $48, but Red Oak was a buck lower and the three-area lean carcass value was down $2.43 compared to last week.
Soybean prices were higher for the week, as heavy rains in parts of South America are delaying harvest, forcing China to buy more U.S. beans.
For the week ended Tuesday, March Soybean futures were up more than 20 cents, with the May contract up 23. However new-crop November was only up a dime, reflecting the fact that although the South American harvest may be delayed, most of those beans will eventually make it to market.
Corn futures were down about four cents for the week, as slack exports and abundant supplies kept corn prices from following soybeans. Wheat prices were also lower, as the bearish supply situation continues to pressure prices. The May futures contract in Chicago lost more than a dime for the week, while most contracts in Kansas City were also down nearly 10 cents.
Next Wednesday, the 31st, USDA releases the Prospective Planting report. Early estimates are for around 90 million acres of corn and 80 million of soybeans to be planted this spring. Both would be higher than 2009 acreage. The continuing series of winter storms that sweep across the major cattle feeding states every few days will continue to lend strength to fed cattle values, but whether or not the funds continue to hold their long positions may have more to do with the short term direction of the cattle markets than all the fundamentals in the world.
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The cattle markets are showing signs of topping out, or at least taking a breather after the recent rally. With some indications that the commodity funds are liquidating, or at least not adding to their long cattle positions, the market could be in for a rough patch. For the week ended Tuesday, April Live Cattle futures were up 22 cents, with the June contract down $1.25 and August off $1.27. The Cattle on Feed report last Friday was a non-event, with the major categories all falling near pre-report expectations. Total cattle on feed on March 1 were at 97 percent of last year, with placements at 99 percent and marketing at 102 percent of 2009. Boxed beef cutout values were sharply higher, helping offset the reduced fund presence. Choice cutouts were up $8.89 for the week, with the Select up $9.03. The Choice/Select spread remains very narrow, at less than a two dollar premium for Choice. Last week’s cash fed cattle trade was stronger, with a wide range of prices from $95 to $98 in light trade late Friday afternoon. That was up about three bucks compared to the previous week. There has already been significant cash trade on Tuesday of this week, with prices mostly a dollar or so lower.
Feeder Cattle futures were sharply higher this week, even after sharp selloffs on Monday and Tuesday. The March futures contract was up $2.42 compared to last Tuesday, with the April up $1.20 and October up 95 cents. Cash feeder auctions are mixed in early week trade, with weather limiting runs in some areas, while some feeder buyers are being cautious about the approaching mid-week storm.
Hog values were mixed this week, with Lean Hog futures mostly higher. The April contract gained 17 cents for the week, while the May was up $1.05 and June gained 95 cents. Cash butchers in Sioux Falls were steady with last Tuesday at $48, but Red Oak was a buck lower and the three-area lean carcass value was down $2.43 compared to last week.
Soybean prices were higher for the week, as heavy rains in parts of South America are delaying harvest, forcing China to buy more U.S. beans.
For the week ended Tuesday, March Soybean futures were up more than 20 cents, with the May contract up 23. However new-crop November was only up a dime, reflecting the fact that although the South American harvest may be delayed, most of those beans will eventually make it to market.
Corn futures were down about four cents for the week, as slack exports and abundant supplies kept corn prices from following soybeans. Wheat prices were also lower, as the bearish supply situation continues to pressure prices. The May futures contract in Chicago lost more than a dime for the week, while most contracts in Kansas City were also down nearly 10 cents.
Next Wednesday, the 31st, USDA releases the Prospective Planting report. Early estimates are for around 90 million acres of corn and 80 million of soybeans to be planted this spring. Both would be higher than 2009 acreage. The continuing series of winter storms that sweep across the major cattle feeding states every few days will continue to lend strength to fed cattle values, but whether or not the funds continue to hold their long positions may have more to do with the short term direction of the cattle markets than all the fundamentals in the world.
