Daily Ag Market Commentary - Live cattle futures were lower on Monday
US - Live cattle futures were lower on Monday. Announced plant shutdowns for tomorrow by Cargill reinforced the idea that packers were going to do their best to better their margins.Feeder cattle futures were lower on Tuesday, finishing lower by about the same amount as they were showing gains earlier in the day. The gains were attributed the lower corn futures, which saw even larger losses after feeder cattle closed. This may offer some support tomorrow, but the lower fat cattle futures and weak feeder demand (sloppy pens) seem likely to limit any upside. The March posted an outside-down day which seems like a negative performance that could attract follow-through selling, however the action was all within recent highs and lows to continue the recent sideways trend. The Bollinger Bands are getting relatively narrow with support at around 95.00 and resistance at around 100.00, suggesting that a breakout move may be in the works fairly soon. One such motivator of that would be Friday's Supply and Demand estimates for corn.
Milk futures were lower. Yesterday's gains seemed to be too much, despite steady to higher cheese prices. Resistance at the previous gap attracted sell pressure. The seasonal for lower cheese prices and continued increases in milk production would seem likely to keep futures on the defensive at these historically high prices that look inflated relative to what cheese prices would normally suggest.
Source: Inside Futures