After last week’s record fed prices and new highs on the futures market, the futures market sharply declined this week, bringing fed cattle prices along with it. Profit taking, as well as concerns over gas prices, plus good old market psychology, led to the first major downward price break we’ve seen in quite a while.
Overall, the market fundamentals continue to look very good. And, while there are significant numbers to work through in March, fed-cattle numbers will continue to tighten after March. In fact, feeder cattle and calves available for placement are expected to be tighter than anything we’ve seen in more than 50 years!
While gas prices and the overall economy remain concerns, the only major question in the marketplace doesn’t seem to be about significant downside risk, but rather how much upside still remains.