Cattle market rally may be short-lived, analyst says

Impressive technical action, but upside limited.

 

By Terry Roggensack, Successful Farming

Agriculture.com - 9/9/2020

 

The cattle futures market is seeing a strong recovery rally, but if the beef and the cash cattle markets remain in a downtrend, the upside appears limited.

 

Live Cattle

 

The sluggish pace of restaurant reopenings and the loss of supplemental consumer income from the government could spark a more negative demand tone ahead. The rally yesterday was impressive, and it could spark more buying interest, but rallies look like selling opportunities to us.

 

The USDA boxed beef cutout was down 12 at midsession yesterday and closed $1.03 lower at $224.82. This was down from $227.95 the previous week and was the lowest the cutout had been since August 19.

 

Cash live cattle have had a quiet start to the week, with no trades reported for Monday or Tuesday. The five-area weekly weighted steer price last week was $103.12, down from $105.09 the previous week but up from $101.73 a year ago.

 

The USDA estimated cattle slaughter came in at 118,000 head yesterday. This brings the total for the week, so far, to 121,000 head, down from 239,000 last week at this time and down from 235,000 a year ago.

 

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https://www.agriculture.com/markets/analysis/cattle-market-rally-may-be-short-lived-analyst-says