Sort & Cull

After trading lower (or merely sideways) over the last month, the cattle complex has finally regained some bullish favor in the marketplace. This couldn't be happening at a more opportunistic time as the market desperately hopes to see a spring rally.

Late last week, the market began to softly change its tune and trade higher, thanks to additional support from the fed cash cattle market, which was able to hold prices mostly steady. Thus, traders were more than willing to help advance the futures contracts and boxed beef prices began to find some stability.

Last week, Northern dressed sales were marked at mostly $372, which is steady with last week's weighted average, and it wasn't until late Friday that some live cattle sales were reported in the South at $233 to $235, which is steady to $1 lower than the previous week's weighted average.

On Friday, March 27, the spot June live cattle contract closed well above its 40-day moving average and boldly charged up to the market's resistance at $240, which hasn't been traded above since last October. By Monday's close, the market continued to scale higher and the spot June contract closed at $240.20, up $1.42 for the day.

Last but not least, the changes seen last week in the boxed beef were wild. On Wednesday, March 25, choice cuts closed at $392 and select cuts closed at $397.03. The market rarely ever sees select prices close above choice prices. But with the industry deprived of enough grinding meat, packers are pulling select cuts to grind into the products they are short of. By Friday's close, the choice/select spread was back to normal. Even though beef prices are high compared to years past, consumer demand remains ample, which bodes extremely well for the industry.

Needless to say, although most of March was a trying time for the cattle complex, the market has regained some bullishness and is trending higher into the new week. Now, whether this will develop into a sizeable spring rally remains the unanswered question. But as always, the industry can hope and time will tell.

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

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