Sort & Cull

I had my doubts about whether Friday's Cattle on Feed report would have a positive effect on Monday's trade, as nine times out of ten traders don't act on the report's findings unless they're bearish. But given that traders have been searching for support in the market to justify trading both the live cattle and feeder cattle contracts higher -- they opted to use Friday's bullish COF report as the glimmer of hope they were longing for!

Friday's COF report may have shown slightly greater on-feed totals than compared to a year ago, but the report's biggest takeaway was that placements were down 12% from a year ago, totaling 17.5 million head. Pre-report estimates forecasted placements to be anywhere from 90.0% to 94.7% of a year ago, so when the report came out and showed that placements in March were 88% -- cattlemen and traders alike were slightly taken back. Click here to read DTN's full Cattle on Feed Report comments: https://www.dtnpf.com/….

Thankfully this finding accelerated both the live cattle and feeder cattle contracts throughout Monday's trade and seemed to reignite the market's bullish nature. Monday's spot June live cattle contract closed $2.37 higher at $178.05 and the spot May feeder cattle contract closed $3.17 higher at $245.17.

When the market first heard about the avian influenza outbreak in dairy cattle a month ago, the market broke lower and has struggled to regain its footing ever since. But Monday's close signals a rekindling of bullish sentiment for both the live cattle and feeder cattle markets. Seeing the spot June live cattle contract close above its resistance threshold is significant. The market traded higher throughout most of last week but taking on current resistance at $175.50 -- or around its 100-day moving average -- seemed like too bold of a move for the market ... until Friday's supportive Cattle on Feed report was issued.

It's still early in the week, but maybe Friday's Cattle on Feed report will serve as a strong enough springboard to turn the market around and again send the cattle complex higher.

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

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