Cattle markets saw some corrective selling today on some decent volume overall. Last weeks cash surge of $2.92 higher pushing the average trade up to $158.17 helped pushed futures higher yesterday and in my opinion will help continue to support the market this week. Choice was up $1.83 and Select was up $2.11 on 104 loads yesterday. Tightening supply continues to provide underlying support and lighter weights suggest producers are current with marketings. The USDA’s estimated cattle slaughter came in at 120,000 head yesterday. This was down from 121,000 last week and down from 123,000 from a year ago. Support levels in April cattle in my opinion are $163 for the first level then below that would be $162. If the market pulls back within this range, I would be looking to go long with an upside objective of $168.
Feeder contracts closed lower at the close but did make new highs earlier this morning. Much like the fat cattle contracts, the feeders did back off the highs on light volume which makes me suspect that this is just corrective selling. September futures settled at 210.975 and in my opinion I think the first level of support for this contract is $210 and would be looking to buy if it falls another dollar or two within the week.
I would advise cow calf operators to start looking at locking in prices around these levels from $210-$215 as I don’t think we are going to see anything above $225 going into the 4th quarter.
April Live Cattle
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