Sort & Cull

This week hosted the happiest Halloween cattle feeding spooks and goblins that have canvassed their way through in years. Not a single feedlot manager (dressed like Donald Trump, Kim Jong Un, or Pennywise) bothered toting retaliatory bars of soap or cartons of eggs as he set out Tuesday night to test the generosity of the market neighborhood.

Somehow the chilly autumn air was completely non-threatening, unlike the imploding fall markets of 2015 (when fed prices fell more than $21 from mid-August to mid-October) and 2016 (when feedlot sales crashed more than $33 from early October). Despite such recent candy-runs from hell, country trick-or-treaters this year had nothing to worry about save the backbreaking heft of their sacks once they turned toward home.

Long before any anguish over costume choice, the cash market's impressive ability to rally $18 since Labor Day went far in removing the horrific fear of one's own shadow. Indeed, even after some beef producers no doubt made themselves sick late that night gorging on Hershey Bars and Three Musketeers, sellers controlled enough blood-sugar to push fed prices yet another $7 higher by Thursday (i.e., $124 to $125).

Dropping the candy metaphor, Halloween 2017 stands to be memorable in terms of good, old hard cash. According to the DTN feeding model, fed cattle that sold around $125 this week returned profits of approximately $100 per head, the best return on investment since mid-July.

Of course, cash traders were not the only kids who laughed and giggled through would-be haunted houses this week. Bullish specs spiriting around the CME also had a blast with the vast majority of live and feeder issues scoring new contract highs in four out of five sessions.

From Friday to Friday, December and February live contracts gained as much as 648 and 600 points, respectively. At the same time, November and January feeders rolled 440 and 557 higher.

The live weekly continuation chart gapped higher, closing at its highest point since early June. For what it's worth, the weekly chart now seems to be inviting a rally toward the spring high of 134.55 basis December.

Not to be too superstitious, but for the nearby board to climb another 700 points by Christmas, it might not hurt to hold on to whatever costume you wore this week

For more from John see www.feelofthemarket.com

Follow John on Twitter @Feelofthemarket

(CZ)

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