Cattle Market May Be Running Out of Sellers After Sharp Futures Decline
After weeks of volatility, it appears the cattle and feeder cattle markets may finally be stabilizing. Analysts suggest that we may have run out of sellers as trading activity begins to level off.
On October 16, January feeder cattle futures peaked just above $3.80, before plummeting nearly $70 over the following three weeks to reach a low just above $3.11 last week. While December live cattle futures did not fall as sharply, they still dropped roughly $30 during the same period, pushing futures about $10 below the cash market.
With the government still closed, the weekly Commitment of Traders reports are unavailable, leaving the market without a clear picture of fund positions. However, early-week trading action indicates that funds have largely liquidated their positions, and analysts believe the market may have exhausted most of its sellers.
This could open the door for a modest recovery. Market analysts note that December live cattle and January feeder cattle could see an additional $2 to $4 gain before encountering heavy technical resistance.
The sentiment in the cattle complex remains cautious but slightly more optimistic as traders watch for signs of renewed buying interest and fundamental support from tightening supplies and seasonal demand.
Audio Reporting by Mark Oppold for Southeast AgNet.