Daily US Ag Market Commentary - Live cattle futures mixed, Milk futures lower.
US - Live cattle futures were mixed on Tuesday, although in reverse from Friday's action. Today, the deferreds were lower and February was higher mostly attributed to a correction from Friday that may have been largely due to the last of the Goldman Roll pressuring FebruaryFeeder cattle futures were lower, but finished 200+ points higher off the lows for the nearby contracts. Feeders rallied as live cattle futures rallied and corn fell from its highs. The session lows were new contract lows for January and March. This attracted short covering and bottom-picking buying. Feeder demand was obviously soft as seen by the lower cash feeder reports. Prices this low may be able to pencil based on live cattle futures, if they're not stressed in sloppy feedlots. This may keep feeder demand soft for much of the winter.
Milk futures were lower. Early action was higher, with the lower closes putting reversal tops on the charts. Steady/lower cheese prices also attracted some selling. The recent gains seemed to be prompted by the idea that higher corn prices would decrease production. My bias is that the higher futures will encourage producers to keep their dairy cows. Some of the bearishness may be attributed to the USDA proposing to lift the ban on importing breeding cattle.
Source: Inside Futures