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Feeder Cattle Futures Advance to All-Time Highs
posted on December 09, 2010 08:47
The following article is from Troy Applehans with CattleFax:
Numerous items have advanced the feeder cattle market, includingthe premiums in the April and June live cattle futures, which will catch the bulk of feeder cattle being placed now. April has advanced roughly $4.50 and June roughly $3.50 since mid-November. In addition, December corn fell nearly $1 a bushel from November 9th to its most recent low on November 23rd. Overall market psychology has been high the past few weeks as fed cattlehave rallied to levels not seen since the 2003 surge. The money flow buying into the futures is apparent. Fund managers have bulked up open interest levels in both live and feeder cattle with some of the sharpest increases in history over a two week period.
This in addition to the currentness situation in feedyards, a healthy export market, net beef supplies indicative of higher prices and a long term favorable supply situation helped push daily highs in spot feeder cattle futures to new all-time highs of $120.15 the 30thof November. This price broke through what has been historically stiff resistance just below $120 that has been unable to be surpassed since first being tested in 2005. Deferred feeder cattle contracts (March through August) have all gone above this level to make new all-time highs as well.
http://www.northernag.net/AGNews/tabid/171/articleType/ArticleView/articleId/1944/Feeder-Cattle-Futures-Advance-to-All-Time-Highs.aspx