Cattle: Boxed Beef Strength Gives Bulls Some Hope.

The bulls were likely disappointed with February cattle's failure to move through the December high on Monday, especially in the wake of a big range-up day last Thursday. Thursday afternoon's Cattle on Feed report showed November placements very close to expectations but marketings higher than expected, which was considered supportive to the February contract, but the report was a bit of an anti-climax. The USDA estimated cattle slaughter came in at 116,000 head yesterday. This was down from 120,000 last week and 117,000 a year ago. The USDA boxed beef cutout was down 12 cents at mid-session yesterday but closed $1.54 higher at $264.48. This was up from $262.38 the previous week and was the highest the cutout had been since December 10. This news may encourage the bulls this morning. Cash live cattle trade was quiet on Monday, with no trades reported. The 5-area weighted average steer price last week was 135.64, down from 137.19 the previous week but up from 101.19 a year ago. Cash cattle have been trending lower for three weeks, which has limited the upside potential for cattle, but higher boxed beef prices could lead the market higher if they can establish a strong trend. The Commitments of Traders report showed managed money traders were net sellers of 13,502 contracts of live cattle for the week ending December 21, reducing their net long to 68,752. The selling trend is short-term negative.

TODAY'S MARKET IDEAS

We could see some back and fill action after the big range-up day on Thursday. February cattle support is at 138.47 and 137.90, with 141.35 and 141.85 as resistance.