Sort & Cull

It was encouraging to see both the live cattle and feeder cattle contracts trade higher through Monday's trade especially given that Friday's Cattle on Feed report was found to be somewhat bearish, with on-feed numbers fully steady and placements up 6% compared to a year ago. Click here to read DTN's Cattle on Feed report: https://www.dtnpf.com/….

But even with Friday's somewhat bearish report, traders weren't lackadaisical in how they handled Monday's complex, as September feeder cattle closed $2.77 higher at $241.35, October feeder cattle closed $3.10 higher at $237.47, October live cattle closed $1.27 higher at $176.97 and December live cattle closed $1.17 higher at $176.37.

Which then begs the question: Did last week's plummet carve out a new low for the current move?

But when looking at the two different segments of the cattle complex -- the live cattle market and the feeder cattle market -- I personally think there's more immediate room for the feeder cattle complex to trade higher, if it desires to do so, than there is in the live cattle sector. When looking at the feeder cattle complex, the market isn't in immediate danger of coming up against resistance pressures, which loom around $240 in the spot October contract, and then further out is the market's 100-day moving average at $254.97.

I understand that feedlots are full and that placements have been high thus far through the 2024 summer months, which have partly been because of the 27% increase year-to-date of Mexican feeder cattle imports. But, even with the market's recent decline in feeder cattle prices in the countryside, prices are still high compared to years past.

Just last week on the Northern Livestock Video Early Fall Preview sale, steers weighing 475 pounds averaged $3.33 per pound ($1,578/head), steers weighing 521 pounds averaged $3.19 per pound ($1,661.81/head) and steers weighing 662 pounds averaged $2.87 per pound ($1,896.71/head).

The biggest struggle that the cattle complex continues to face is external pressures from both the economy and the presidential election. Unfortunately, neither of these factors are going to go away overnight, but cattle buyers are keen to the fact that feed prices are affordable. They also took note of Federal Reserve Chairman Jerome Powell's statement last week that interest rates could be decreased in the September meeting. So, there are still a plethora of external pressures looming overhead of the cattle complex, but maybe, just maybe, the market showed some effort and desire to press onward as Monday's market closed with higher prices. As always, time will tell.

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

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