Senior Farm and Ranch Broadcaster, Ron Hays, is talking with Oklahoma State University Livestock Market Economist, Derrell Peel, about the cattle markets.
“We had such a runup in markets, both cash and futures all year, so as we got into the fall, the idea that we would see a correction wasn’t really a big surprise, but what happened was a combination of a futures market correction and then geopolitical events, a bearish cattle on feed report, and it really snowballed in the futures market,” Peel said.
This correction, Peel said, has impacted the cash markets for heavier-weight feeder cattle and fed cattle. As for the reason the futures markets have been hit so hard, Peel said there are a few different factors at play.
“Obviously, the big runup we had was built on a long position, and it is outside money,” Peel said. “It is not really fundamentally based; it is investor-type money. After a runup like that, the idea that they are going to sell off some and take some of those profits out of the market is not a surprise.”
Peel said he expects there to be a bottom in the market relatively soon, and his outlook has not changed.
“We will get back to business here and see those cash market fundamentals take hold,” Peel said.
Peel said he is still very bullish for cattle markets going into 2024 and talked a little bit about past cattle on-feed reports.
“The September one came as a surprise- the bigger placements,” Peel said. “We had big placements in October on a year-over-year basis, but it wasn’t a surprise; it was anticipated. The fact of the matter is, even if you add these numbers up, it is not really that many cattle. It is more of a psychological impact. It does change the timing a little bit on fed cattle marketings coming out of the feedlot in the first quarter of next year, so we pulled some cattle ahead a little bit, but none of that really changes the fact that at the end of the day, we really don’t have more cattle.”
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