There are very few weeks throughout the year where the cattle market doesn't have a few things to juggle, but this week the market will be pressed to manage multiple factors.
Last week, the corn market had a resurgence after bottoming at $5.82 in the September 2022 contract, and at $5.71 in the December 2022 contract. Since then, the markets have rallied to $6.37 for September 2022 corn and to $6.29 for December corn. The forecast's drier outlook is positive for the corn crop as farmers move deeper into the pollination stage.
With the grain sector juggling weather conditions in the U.S., and Ukraine developments overseas, the market is subject to change -- but early this week, the weather forecast bodes well for farmers.
On the opposite side of the spectrum, the feeder cattle market is begging for someone to open the gate and allow the market to run higher. Monday's close did that a little bit -- the August contract closed $3.15 higher at $174.87, the September contract closed $2.67 higher at $177.40 and the October contract closed $2.12 higher at $179.87. Oklahoma National Stockyards in Oklahoma City, at its midsession point, had a big run of 9,500 head feeder steers that traded $3 to $5 higher; steer calves traded steady to $3 lower and heifer calves were selling $1 to $4 higher. Another good test of the market will be Superior's Week in the Rockies sale where 209,370 head of cattle will sell.
As cattlemen try to gauge what feeders will be worth this fall, these sales help set the market's tone and bring a key sense of awareness to the thinly developed fall market. And, not to be forgotten, the market will have another Cattle on Feed report released Friday that could yield lower total-on-feed numbers depending on June placements -- which would unquestionably help fan the market higher.
Higher input costs amid a weakening economy and rising interest rates are a scary devil to dance with, but it's hard to deny the cattle market is sitting prime to rally, given that the nation's cow herd has been liquidated at an unprecedented speed. The battle between feeders and corn, long-term bulls and short-term bears will be the center of attention in the cattle market's mind.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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