Sort & Cull

Does 1% Make That Big of Difference?

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
Friday's Cattle on Feed report shared higher placements, which most certainly came as a surprise. (Photo by Dawn Sahli)

Last week's trade ended up being a home run for the cattle contracts. Throughout the week, February live cattle gained $3.95, April live cattle jumped $4.33, the soon-to-expire January feeder cattle contract added $2.68 to its position and March feeder cattle gained $8.33. While both the corn and soybean contracts started to correct, the cattle contracts had a surge of support infiltrate the marketplace and help drive prices higher.

After the contracts closed Friday, the only thing cattlemen had left to do in monitoring the markets before the week's end was to see how the Cattle on Feed report fared.

Analysts were quite certain that the report would show bullish placements and help aid in the already supportive nature that the contracts were thriving in. But upon arrival, Friday's Cattle on Feed (COF) report shared the exact opposite -- higher placements. Higher placements can be an alarming concern to cattlemen and feedlots, as this indicates later down the road that there will be greater supply of market-ready fed cattle, which tends to negatively affect prices. But Friday's COF report only shared that placement were up a mere 1%, totaling 1.84 million head.

Heading into the weekend, cattlemen, market analysts, feedlots and everyone in-between tangoed over the thought, "would Friday's placements being up a measly 1% have the power to derail the cattle market's gusto and drive prices lower?"

One of the most important things to remember when analyzing the cattle market and its bullish and bearish interjections is that nothing can be looked at through a singular perspective. When analyzing Friday's data, we cannot simply look at what the COF report has to share and decide what the market's futures will hold. It's vital to take into account the board's technical position, the market's fundamental backing and any seasonal trends that may be noteworthy.

Upon further absorbing the COF report and all of its content alongside where the cattle market sits, it's safe to say that Friday's COF report was disappointing. However, the market still begs to trade higher and the later it gets into the second quarter, the bolder the market's aspirations for higher prices will most likely be. Friday's placement increases of 1% didn't end up devastating the market's recent accomplishments, but it's important to remember that all situations must be looked at individually as the market is constantly changing.

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ShayLe Stewart can be reached at


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