Cattle futures finished higher today for both the fats and feeders. Market fundamentals are strong to start this week which is driving these prices and looking like a breakout in the market. Last week the cash trade was higher and the expectation is that this week will be more of the same as far as strong cash. Packers are still believed to be short-bought on near-term needs. The noon beef report today showed Choice grade cutout value up $1.62 at $266.36 and Select grade up $1.70 at $253.31. The Choice-Select spread at midday was $13.05. Movement at midday was 67 loads. Cattle slaughter is seasonally declining is likely to continue to do so for much of February and possibly into March. Also, look for average weights to decline through late winter and into early spring. While cattle slaughter usually increases when springtime arrives, the rise likely will reflect the addition of calf-fed animals to the slaughter mix, which would do little to increase Choice beef supplies. Fed cattle supplies are running below year-ago levels for only the sixth time in the past 20 years. In my opinion, I would be looking at $168 for the next price target in April Cattle.
Feeder cattle futures bulls also have the overall near-term technical advantage. The next upside price objective for the feeder is to close March futures prices above technical resistance at the January high of $188.75. The next downside price objective is to close prices below solid technical support at $182.50. First resistance is seen at today’s high of $187.85 and then at $188.75. First support is seen at $186.00 and then at today’s low of $185.45.
April Live Cattle
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