Sort & Cull

The rally taking place throughout the cash cattle market has initiated a bullish push throughout the cattle sector. Market enthusiasts and analysts have been focusing much of their time on the live cattle market, but it's equally as exciting to see what's transpiring throughout the feeder cattle market.

The feeder cattle market has been torn as of late, as the market has had

to weigh the opposing questions in which the bullish live cattle and rallying corn prices have placed before the market. If the market had no fears of rising input costs, then "forward march!" the market would cry, but, as always, it's not quite that simple.

The feeder cattle market's rally has stemmed from multiple factors. First, given the harsh onset of drought that much of the West has endured this past year, many producers were forced into marketing their calves earlier than they usually do. This has lessened the supply pressures that the market is used to stomaching later in the fall, and is helping drive competition between buyers as the demand for both calves and feeders is strong. Secondly, despite buyers knowing that the corn market is likely to continue its rally, buyers are encouraged by the huge leaps and bounds that the fat cattle prices made in the last month.

In the last three weeks, the fat cattle market has jumped $10 higher, and packers are still showing immense interest in the market as they are remain short bought. Given how the market has worked historically, the fat cattle market finds a seasonal top sometime between March and April, sometimes even in the early parts of May. With how few cattle there are for packers to bicker over, prices are likely to keep this upward trend into next spring until the seasonal top is made.

Corn prices, processing speeds and beef demand will weigh heavily on the success of this market's rally, but as the market sits today, the bull spreaders aren't fearful of the days ahead and anxiously welcome the new year's approach.

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Plan on attending the DTN Ag Summit, Dec. 5-7 in Chicago, to get an inside look at what the various markets anticipate for 2022. I will be presenting the Livestock Outlook on what to watch for in the year ahead. Visit www.dtn.com/agsummit for more details about the summit and to register.

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

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