The cash market for fed cattle last week traded up to $2.00/cwt. higher in the South and $3.00/cwt. higher in the North than the previous week. Early week sales were reported mostly steady, with the previous week at $186.00/cwt in the South and $185.00/cwt. in the North. By Friday afternoon, cattle were trading $187.50/cwt. in the South and $188.00/cwt. in the North. Dressed sales were reported to be $290.00/cwt early in the week and $300.00/cwt. by late.

Dressed steer weights remain elevated, reported last week at 960 pounds for steers and 869 pounds for heifers, two pounds higher and steady compared to the previous week’s report, respectively.

On Friday, the Chief Veterinary Officer of Mexico notified USDA’s Animal and Plant Health Inspection Service (APHIS) of a case of New World screwworm (NWS) discovered in a cow in the southern state of Chiapas. APHIS responded by placing restrictions on the import of animal commodities from Mexico.

As of now, there have not been any border closures, only restrictions, with no further clarification of what these restrictions consist of. Should any border closures materialize, it is likely to have bullish implications on U.S. cattle prices. However, the case was detected in Chiapas, the southernmost state of Mexico, while the great majority of feeder cattle shipped from Mexico to the U.S. originate from the northernmost states of Mexico. U.S. feeder cattle imports from Mexico through September are up over 180,000 head, or 21%.

Related:U.S. beef exports rebound in China, Korea; Pork on record pace

USDA's latest “Cattle on Feed” report landed near expectations. As of November 1, the number of cattle in feedlots of 1,000 head or more totaled 11.94 million head, 100.3% of the year-prior figure. Analysts expected 99.9%. October marketings came in at 104.7% of the 2023 level, just below expectations for 105.2%. October placements strayed a little more from the consensus call: 105.3%, compared to expectations for 103.8%.

December live cattle futures finished higher on the week due to strengthening in the cash market, up $3.825/cwt. to $186.775/cwt. The most actively traded February contract finished $2.95/cwt. higher on the week at $188.20/cwt. Resistance above stands at the late-October high of $190.325/cwt. for the February contract. February is trading well above major moving averages with the 100-day at $184.55/cwt. and the 200-day at $186.50/cwt.

Friday’s CFTC Commitment of Traders report showed managed money adding another 4,810 contracts to their net-long position, now at 111,853, approaching last year’s largest net-long position of 120,400 contracts.

Related:Seasonally active weather pattern continues

January feeder cattle finished the week $7.075/cwt. higher to $254.30/cwt., the highest weekly close since the last full week of July. The 100-day moving average for January sits at $242.15/cwt., a whopping $12.00/cwt. below Friday’s close. A close above $257.20/cwt. opens the door to the psychological $260.00 level.

The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.