Weekly Livestock Comments
February 5, 2010
Additional Comments by Dr. Emmit Rawls added today, February 1, 2010
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Click to subscribe to podcastBEEF CATTLE: A modest fed cattle trade developed in the north on Thursday with prices $84 and $135 to $137 dressed. Friday sales were at $138. Feedlots in the south had asking prices of $87+. With declining cutouts, it could be tough to get the higher money. The fact that packers paid $1 to $2 higher than last week in the north indicates that packers may be short bought and or dealing with weather issues in getting cattle to the plants. Cutout values on Thursday compared to week ago were down $1.34 on the Choice and down .59 on the Select. At midday Friday the Choice cutout was $137.62 with Select at $135.48. The Choice-Select spread was $2.14. Last year it was $3.51 and the 5 year average was $8.81. This indicates there are ample supplies of Choice product relative to industry needs and weakness in demand for Choice product due to economic conditions for high end restaurants and consumers. The 5 area weighted average prices thru Thursday were $83.74 live and $136.34 dressed, compared to $83.46 and $135.64 a week ago. A year ago prices were $81 and $131.07. On the Tennessee auctions this week receipts were very limited due to snow and very wet conditions. In a very limited trade, the cows were called $1 to $2 higher, with bulls $2 to $3 higher. Feeder classes were steady to $5 higher. Average receipts per sale this week were 600 head on 4 sales; last week 650 on 8 sales and a year ago 464 on 11 sales. Following last week’s cattle inventory report, the market reacted negatively on Monday because the report showed slightly smaller reductions that it was expecting. The report really has little reason to impact nearby markets. It did show the feeder supply outside feedlots about even with a year ago. Near term supplies of fed cattle should be manageable, with weather reducing harvest weights. Whether fed prices can surge to levels of April and June futures remains to be seen, as spring demand will be key. The lower December placements should shore up prices in the late spring and early summer. The higher futures and weaker corn today should support feeder prices in the markets next week, however we must find support in the cutout values for this recent up tick to be sustained.
TECHNICALLY SPEAKING: based on Thursday’s closing prices. February cattle closed at $86.55. Support is at $86.09, then $85.37. Resistance is at $86.82, then $87.54. The RSI is 57.04. April closed at $90.07. Support is at $89.52, then $88.67. Resistance is at $90.37, then $91.22. The RSI is 55.77. June closed at $87.82. Support is at $87.22, then $86.65. Resistance is at $88.10, then $88.50. The RSI is 53.48. March feeder cattle closed at $97.25. Support is at $97.03, then $96.48. Resistance is at $97.58, then $98.13. The RSI is 41.72. April closed at $98.97. Support is at $98.77, then $98.32. Resistance is at $99.22, then $99.67. The RSI is 44.70. May feeders closed at $100.23. Support is at $99.70, then $98.60. Resistance is at $101.25, then $101.85. The RSI is 50.21. Friday’s closing prices with the change from Thursday and a week ago were as follows: Feb. Live cattle Feb. $87.42 +.87 and up 1.62 from 1/29; Apr. $90.40 +.32 and 1.03; Jun. $88.10 +.25 and -.02; August $87.35 +.10 and +.03. March feeder cattle $98.32 +1.07 and -.55; April $99.67 +.70 and -1.28; May $101.17 +.92 and -,63. March corn was $3.51 and ½ down 2 and ½ from Thurs. and 5 cents from last Friday.
