Rising Momentum
Friday’s triple digit rally pushed live cattle back to net gains for the week, signaling a market surge. Futures closed $0.95 to $1.95 higher going into the 3-day weekend, leaving the April contract with a net 82c gain Friday to Friday on the 8th consecutive week higher.
The market has witnessed a notable upswing, with April up $22.15 (13%) from the December low. However, despite this promising trend, it remains $12.30 under the LoC high.
Market Performance
USDA reported light $180-$182 cash sales on Friday, indicating the bulk of action for the week was near $180. Furthermore, CME confirmed 23 new deliveries for Feb futures, with 15 out of Amarillo and 8 for Dodge City.
Feeder Cattle and Market Index
Front month feeder cattle led the rally on the last trade day of the week, experiencing 1.1% to 1.6% gains across the front months. This resulted in a net gain of $3.87 for March and a net $1.77 gain for April. Additionally, the CME Feeder Cattle Index for 2/15 was 35 cents weaker, settling at $244.58.
Investor Activity
CFTC data confirmed net new buying from the spec funds during the week that ended 2/13, extending the group’s net long to 42,472 contracts. The spec funds were revealed to have a 7,364 contract net long in feeder cattle on 2/13, showing a 1,723 contract stronger net long for the week, reflecting net new buying.
Industry Trends and Predictions
USDA’s Boxed Beef prices were mixed as Choice observed an increase of 90 cents, while Select weakened by $1.33 in value on Friday afternoon. As for beef production, the week recorded output at 506.9 million lbs with a 608k head harvest, marking a 2.5% decrease for the week and settling 1.5% below the same week the previous year on a 2.3% reduced slaughter.
Current Closing Prices
Feb 24 Cattle closed at $184.77, up by $1.375, while April 24 Cattle closed at $187.55, up by $1.950. In the feeder cattle segment, Mar 24 Feeder Cattle closed at $251.02, up by $3.925 and April 24 Feeder Cattle closed at $253.55, up by $3.325.
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
