Watching last week's cattle market play out through the week's duration was nearly every cattleman's dream. From a technical standpoint, support was ample and traders were willing to move the contracts when given any opportunity. From a fundamental point of view, the market's bold bullish outlook only seems to be coming to life more and more.
It will be interesting to see what traders do with the complex this week given that last week's market advanced aggressively. Throughout last week's market, October live cattle gained $3.07, December live cattle gained $3.25, September feeders gained $3.50 and October feeders gained $4.50. By last Friday's close, nearly all the nearby contracts were either up against long-term resistance levels or were trending slightly above them.
It was rather telling for the market to close above resistance in the spot October live cattle contract Monday afternoon, which also happens to be another new contract high ($184.22).
Tuesday's World Agricultural Supply and Demand Estimates (WASDE) report could keep the market trading positively if beef demand through the end of 2023 isn't scaled back, and if demand for the first two quarters of 2024 looks supportive. And, as always, seeing what changes come for quarterly price predictions could be invigorating as well.
It does surprise me that packers only bought 58,819 head in last week's negotiated cash cattle market. For going on three weeks now, packers have been reluctant to buy aggressively in the cash market, which is a fair play on their part given that they want to avoid seeing cash prices inch higher at all costs. But, at what point are they going to desperately need cattle and have to potentially pay $3.00 to $5.00 more in one given week to secure the supplies needed?
Needless to say, there are a lot of positive moving pieces affecting the cattle complex right now and it seems like the market is starting to again come alive. This week, I will be especially interested to see how traders react to Tuesday's WASDE report and how cash cattle prices pan out, and to monitor packers' overall behavior. The floodgate to the fall rally may have been cracked last week, but when is the gush coming?
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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