The grain complex wasn’t the only market trying to close on highs of the day. Live cattle and feeder cattle also ended the day strong. Kyle Bumsted, Allendale Inc, joined the Fontanelle Final Bell to discuss why cattle were having a decent run up in the market.
There’s plenty of obstacles for the cattle markets to overcome currently including a cattle on feed report Friday. Bumsted isn’t overly concerned about the cattle on feed report believing the placements could be friendly to the market.
What Bumsted is currently interested in, is the fact the recent gains made in cattle are coming with an increase in open interest for most contracts. That would indicate new positions entering the market rather than shorts taking their money out of the market.
Bumsted is also closely watching how much the next stimulus package could mean for individuals. That could indicate how much disposable income they have ready to try and buy beef following the Christmas season. Looking at local grocery store prices Bumstead believes current beef prices on the shelf are very attractive to the consumer.
You can hear all of Bumsteads comments on the livestock markets here: