Sort & Cull

Friday's Cattle on Feed Report was a lot to take in as the report's placement data came in 4% higher than a year ago at 2,046,000 head. And even though the feeder cattle complex opened lower at Monday's start, traders quickly brushed off Friday's report and again sent the market trading higher.

I believe it's the market's strong fundamentals that quickly reassured traders and motivated them to change their tune Monday morning and to look past Friday's Cattle on Feed report. Because with fed cash cattle prices ringing new weekly highs nearly each week, and feeder cattle prices showing immense buyer demand, it's hard not to continue to trade the contracts higher when all the market's fundamentals are positively at play.

To put it into perspective just how strong the market's fundamentals are, I think it's worth our time to discuss a few of the key takeaways from last week's market. For starters, the fed-cattle market scored record-high prices last week throughout the entire 5 Area feeding region (Texas/Oklahoma/New Mexico; Kansas; Nebraska; Colorado; Iowa/Minnesota). Live steer prices in Texas averaged $189.41, and live steer prices averaged $190.29 in Kansas. Live steer prices in the North averaged $197.30 in Nebraska, and $197.06 in Iowa. As for dressed prices, Nebraska steers averaged $310.82, and Iowa steers averaged $309.58. Again, all of which are record-breaking prices for the market! Last week's negotiated cash cattle trade totaled 73,368 head: 79% (57,696 head) were committed to the nearby delivery, while the remaining 21% (15,672 head) were committed to the deferred delivery. Couple that exciting news with the fact that the CME feeder cattle index closed June 21 at $257.47 -- it's hard not to let your jaw drop in awe of these prices.

The market may have been caught off guard by last Friday's bearish Cattle on Feed report, but thankfully the market's strong fundamentals are encouraging enough to traders to keep them active in the marketplace.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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