Cattle On Feed More Bear Than Bull

The momentum that drove the market $3 higher two weeks ago, didn’t continue into last week’s cash trade.  The absence of positive movement on the board, forced feeders in the south to settle with steady at $111, with the north steady to lower. 

With the cattle on feed report more bearish, we could potentially see a negative impact to the board this week. However, the kills continue to stay large, and may be able to help offset weakness in the board. The margins in the packing business continue to be good. Therefore, the packer has great incentive to keep processing as many head as possible to take advantage of that margin. 

The cattle on feed report did not create a positive outlook for the short-term future.  However, some indicators exist that the market may not lose all its luster over the next several months.  Good retail demand and packer margins should help keep the market moving along at a good pace.