Hit Reverse

By Cassie Fish, http://cassandrafish.com

CME cattle futures had staged an impressive rally off of last week’s lows until today, when the market threw itself into reverse and is now down over a couple hundred points. The hourly stochastic had become overbought and have corrected in a hurry. Yesterday’s lows are history and most active February LC failed at the 10 day moving average. Today’s action is a short term blow to bulls.

On the fundamental side of the market, boxed beef values continue to leak lower and the best cash bids in the south, along with some light trade is $178. Is this enough to tank the market?

Actually an unconfirmed rumor that Tyson Foods was hacked appears to be at least partially responsible for today’s fast and nervous sell-off. Cattle traders recall the short term bearish impact of a JBS hack in May 2021 that disabled operations. That turned out to be a great buying opportunity in futures. TSN beef plants are running and there are those in the industry who state there are no negative issues on Tyson’s beef business related to a cyber-attack whatsoever. The company does not appear to have released an official statement.  

Tomorrow’s much anticipated UDSA Cattle-on-Feed report will be released. If the hack rumor proves false, it would not be a stretch to look for some futures market price recovery into the report, given how much bearishness has been priced in the market.

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