Live and feeder cattle futures are up in overnight trading, following through with steep gains on Thursday on lower corn prices despite what should have been a supportive weekly export sales report.\r\n March feeders gapped higher Thursday and continued to move up to a new contract high of $170.75 per cwt, eclipsing the previous high of $170.67 that was set on Jan. 22. Thursday’s gap on daily charts is the second this week.\r\n Live cattle Thursday set a three-week high at $143.35 per cwt and appeared to lead feeder cattle futures higher, market analysts said. However, the CME’s Feeder Cattle Index also jumped $1.39 on the day to $170.99.\r\n Feeders also got a boost from weaker corn prices. Export sales last week were strong at 50 million bushels, but traders are nervous that there has been no resolution with China over an unapproved variety. Traders also focused on the US’ current lack of competitiveness in world markets as the latest rally lifted US Gulf prices above those of competing countries.\r\n Cattle futures got a boost from a stabilizing beef market and reports of packer bids for slaughter-ready cattle in the Plains that were $1 per cwt higher than last week’s $141 trade at $142. There were even reports of scattered trades at this level. They never became widespread with feedlots seeking $144 or more, but it showed futures traders there was potential for more.\r\n The USDA’s boxed-beef cutout was nearly flat Thursday with the choice cutout value up $0.05 per cwt at $208.10 and select up $0.13 at $207.76. The choice/select spread narrowed to $0.34, but there were 172 loads of fabricated product sold into the spot market.\r\n So with corn not reacting to what should have been somewhat supportive export news, signs of support in the beef market and continued tight supplies of feeder cattle from a declining US herd, feeders and live cattle popped Thursday. \r\n Some profit taking by speculators is possible today ahead of a long holiday weekend, but trend-following funds may decide to wait it out and see what develops.\r\n Lean hog futures also followed cattle higher, market analysts said. But hog traders also are worried about the effects of the Porcine Epidemic Diarrhea virus that is killing thousands of baby pigs. Almost weekly stories about the virus’ spread and this week’s news of a new strain of a similar virus being found in Ohio keeps traders on edge and the market vulnerable to short covering when competing markets like cattle go higher.\r\n However, the USDA’s pork cutout value was weaker Thursday, so the market backed away from its highs.\r\n Another major winter storm is hammering the US Northeast this morning, after leaving the South buried in layers of ice and snow Wednesday and Thursday. As many as 625,000 homes and businesses in 16 states were without power after the storm, according to CNN, although the total is down to about 525,000 this morning. \r\n There are no reports yet of damage to poultry facilities in the south or to pork plants in North Carolina.\r\n Airports are beginning to reopen, news reports say, but many roads remain clogged with snow, ice and abandoned cars and trucks. Rail service is slowed to a crawl, and the nation’s river systems are ice covered or clogged with ice.\r\n A forecasted warming trend moving in from the west promises some relief, just in time for some farmers in the far south who might want to begin planting corn in a few weeks.\r\n
Cattle feeding is pretty straightforward - doing it profitably isn't.