Cattle markets are strong as we finish Thanksgiving week. Live cattle traded $3.50/cwt higher this week while beef exports remain very strong and continue to support a bullish cattle market.
Looking forward through the end of 2010 and the beginning of 2011, we anticipate reductions in beef cow slaughter as the liquidation slows down. As such, this should provide even more support to the complex as movement of end-products and grind have been, and should remain, strong as we move forward. Seasonally we are entering the Christmas season and demand for particular middle-cuts should increase over the next couple of weeks.
The break in the corn market has given feeders a chance to price corn $0.40-0.50/bu. cheaper than they could have at the beginning of the month; given the strength in live cattle futures, there is ample opportunity to hedge in profit as long as the input costs are accounted for.
Feeder cattle are strong, and as long as live cattle remain bullish, we do not see a considerable break in the feeder cattle market. Although corn has opportunity to rally again, we feel that feeders will be strong as supply issues force that market higher.