Harrington's Sort & Cull
John Harrington DTN Livestock Analyst

Friday 01/24/14

Confession of a Cash Market Piker

Mea culpa to all bullish visionaries, pie-in-the-sky marketers, and impossible dreamers. When it comes to aggressively anticipating this month's cash cattle potential, I have been about as helpful as a doomsdayer still nervously monitoring the Mayan calendar.

In case you've been stuck on the George Washington Bridge for the last several weeks, let me briefly recount the extreme proportions of my embarrassment.

Suitably mindful (or so I thought) of tightening fed supplies and substantial price promise through the first quarter of 2014, I have steadfastly called the cash cattle market "steady to $2 higher" in each of the last four consecutive weeks.

I may have nailed the general price direction, but my swing proved to be no more on the bullish curve than a farm team reserve with a seeing-eye dog.

Between the Christmas break and this week's latest installment of record-breaking history, the live price of choice steers and heifers has surged by no less than $18 (i.e., $132-$150). In terms of the greatest price swing over a short period, the early year price explosion just missed taking the trophy away from the first three weeks of October 2003 when the 5-area steer average rocketed $19 higher.

Nevertheless, the recent speed of recent cattle and beef appreciation has been nothing short of extraordinary. Sometimes I feel like I'm chasing the space shuttle with a go-kart.

Growing up, I can remember my dad getting excited if the Omaha market advanced by a mere quarter. The nonstop bullish earthquake of 2014 would have sent the Old Man into a blissful coma.

Pricing cattle in this meteor storm has become a dangerous sport. An old packer friend of mine had a great way to communicate his market indifference and apathy. When an overly anxious beef producer would ask him for a starter bid, he would respond with "nothing with two out."

With the tables favorably turned, perhaps feedlot country needs to rip a page out of his ornery notebook, pricing next week's showlists at "unthinkable plus $2."

For more of John's comments, visit http://feelofthemarket.com/…


Posted at 3:22PM CST 01/24/14 by John Harrington
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