Daily US Ag Market Commentary - Live cattle futures mixed, Milk futures higher
US - Live cattle futures were mixed on Wednesday.Feeder cattle futures were mixed on the close, finishing strong once again for most contracts. The session highs came early associated with corn at its session lows, while the session lows for feeder cattle were associated with corn at its session highs. Likewise, the late rally in feeder cattle saw corn futures slipping back. Gains were justified by the futures discount to the feeder index. The late slide by January feeders reflects lower cash feeder prices. Feeder demand is expected to remain soft with sloppy yards and corn prices trending higher. March feeders closed near the previous two closes, and have developed a consolidation trading range of roughly 91.00 to 94.00.
Milk futures were higher. Early action was mixed. Cheese prices were steady and butter prices were slightly higher. The higher corn prices prompted additional buying on ideas that producers would cut production. The gains failed to confirm yesterday's reversal tops, triggering buy stops of shorts as futures pushed to new highs or match previous highs for the move. My bias is that the higher milk futures will encourage producers to keep their dairy cows, which will lead to higher production that expected and should prompt lower prices than futures are offering.
Source: Inside Futures