Thursday, October 21, 2010

Market Watch: Cattle Markets

Last week, cattle feeders held out for higher money and, rather unexpectedly, got it on a relatively light volume of cattle. The futures market was apparently caught a little off guard by the roughly $1.50 higher cash cattle prices, and nearby Live Cattle futures raced to catch up, adding over $2 in Friday’s trading. Higher fed cattle prices were supported by stronger wholesale beef prices. The Choice cutout added almost $2 over the course of last week, ending up at $154.68 on Friday.

Feeder cattle futures also gained back some ground on Friday as the corn market took a breather from its recent rally. Cash calf markets were hit pretty hard last week, though, with prices (especially on stocker cattle) dropping in response to the prior week’s corn market shock. At Oklahoma City, feeders were called $2 to $3 lower while stockers were called $5 to $8 lower.

John Michael Riley, Ph.D., Asst. Extension Professor, Department of Agricultural Economics, Mississippi State University
John D. Anderson, Ph.D., Livestock Economist, American Farm Bureau Federation