Dec Cattle Commentary

Peter McGinnGeneral Commentary

Dec live cattle futures finished up .100 today and closed at 150.675. The August cold storage report came out yesterday and although it showed total pounds of beef were down 1% since last month, year over year total pounds of beef were up 23%. The price reaction to this report was seen more in the feeder cattle market than the fats as feeders were down over $2 the contract months of October through January. In my opinion the Dec fat cattle is still looking to stay within a $2 range from 150-152. Increasing volume the past 3 sessions for Dec could signal a breakout to the upside potentially for cattle.

I believe if this happens then there will be a price spike to the 154-155 level making new highs. There is still concern for lack of production going into the 1st quarter but according to the Cattle on Feed reports, there continues to be more cattle placed on feed year over year.

Cash was traded lightly on Monday with the 5-area weighted average steer price last week at 146.88, which was up from 144.39 the previous week and 125.47 from a year ago. Slaughter numbers came in at 125,000 head yesterday, up from 121,000 last week and up from 117,000 from a year ago.