Cattle markets were mixed today with live cattle being down as low as 92.5 cents today but showed a little recovery as it settled at 155.425, down 0.250 in the February contract. It seems to me that with cash markets trading in the mid to high 150’s in some of the northern plain markets and the Texas/Oklahoma region between $154-$155 (with 8100 head traded on Monday), futures are getting support and could retest the highs before the year is over. After the holiday buying is over, cash markets are expected to take a little dip before stabilizing again and possibly trade higher as expected beef production is suppose to be lower by 4.5% in the first quarter and 7.3% in the second quarter. Feeder cattle were higher today as corn futures fell 7 cents in the march contract. January feeders are now trading above the 60-day moving average and suggests that the longer-term trend is now bullish. From a technical aspect, momentum studies are trending lower at mid-range and if certain support levels are violated then we could see an accelerated move to the downside, in my opinion. The jan feeder chart looks to have formed a double bottom, if any bullish cash news or continued selling in corn then I believe the market could make a run up to the 186 level.
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Peter McGinn
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