Weekly Livestock Comments
By Emmit Rawls
November 6, 2009
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Click to subscribe to podcastBEEF CATTLE: BEEF CATTLE COMMENTS - EMMIT RAWLS - U. T. EXTENSION (11/6/09)
Fed cattle sold a steady to $.50 higher this week with prices of $87 to $87.50 in the South and $86 to $87 live in the North and $134 to $134.50 dressed. The trade was modest at best. The 5 area weighted average prices were $86.44 live and $134.24 dressed compared to $86.84 and $133.86 a week ago. A year ago prices were $90.20 live and $143.36 dressed. Cutout values were climbing slightly early in the week, but again bumped their head in the low $140s. Thursday’s cutout values were up .17 on the Choice and down .24 on the Select compared to Thursday of last week. At midday Friday the Choice cutout was $140.87 down .46, while the Select was down .21. The Choice Select spread was $5.32 compared to $5.28 a week ago. The news on the general economy this morning was not encouraging for beef prices. With unemployment pegged at 10.2 percent, the lowest since 1983, consumers are likely to continue managing their food dollars very closely. This does not bode well for beef which is more expensive than other meat proteins. Current support in the fed cattle market is attributable to reduced placements on feed in the May June period and perhaps some early booking of high end products for the upcoming holiday season. This market strength has carried the February and April fed cattle futures $3 higher, but some weakness in cutout values and the economic news this morning has futures contracts sharply lower. Tight market ready numbers of fed cattle may give some support to prices for another week or two, but any help from the demand side does not look promising. Having China reopen its market to U.S. pork should help take some of that product off the domestic market and provide some price support for pork. We should begin to get additional milk cows from the CWT buyout on the slaughter cow market. Hopefully, they will not be as bunched as they were in June. Prices on feeder steers and bulls thru Wednesday were called steady to $4 higher, with feeder heifers steady to $2 higher. With the lower futures today, feeder cattle prices will receive some pressure this weekend and into next week. Slaughter bulls were called $1 to $3 lower and slaughter cows were $1 to $2 lower. Average receipts per sale on the auctions this week were 821 on 11 sales, compared to 714 a week ago and 725 a year ago. With corn harvest picking up speed we could have some additional pressure on those prices. This could provide some support to feeder prices, depending on what happens from here on out with the fed cattle futures. For those feed users, the break in corn represents an opportunity to buy corn or forward contract future needs. If one can pick the bottom of this decline in corn prices, then you are smarter than most. The open weather is providing some harvest pressure on prices, but could be over in a couple of weeks depending on weather.
TECHNICALLY SPEAKING: based on Thursday’s closing prices: December live cattle closed at $86.35. Support is at $86.17, then $85.67. Resistance is at $86.67, then $87.17. The RSI is 52.31. February cattle closed at $87.22. Support is at $86.93, then $86.28. Resistance is at $87.58, then $88.23. The RSI is 53.58. April cattle closed at $89.72. Support is at $89.40, then $88.47. Resistance is at $89.92, then $90.35. The RSI is 59.07. November feeder cattle closed at $95.60. Support is at $95.50, then $95.20. Resistance is at $95.80, then $96.10. The RSI is 54.32. January feeders closed at $97.18. Support is at $96.92, then $96.37. Resistance is at $97.47, then $98.02. The RSI is 63.23. March feeders closed at $97.30. Support is at $96.95, then $95.90. Resistance is at $97.45, then $97.95. The RSI is 53.47. Friday’s closing futures prices were: December live cattle $85 down 1.35; Feb. $86.27 -.95; Apr. $89 - .72; Jun. $85.85 -.55. Nov. Feeders $94.62 -.95; Jan. $96.10 -1.10; Mar. $96.50 -.80; Apr. $96.75 -.67. December corn closed at $3.67 down 9 and 1/2.
