It looks like cattle is in a bear market at the moment, but if we see a close over 106.900 in the August contract, that would signal a bottom turn around in the market and eventual follow through to the May highs around 110.000. If the price fails to break through the 106.900 price, then we may see a rejection that would follow through to 103000 levels. For the upcoming cattle-on-feed report this Friday, the expectations have placements coming in around 4.2% lower than last year. Marketings are expected to have a slight bump of .8%, and the On-Feed supply is supposed to come in around 1.3% above last year.

One thing to consider is that there may be a feeling that protein will become tight in supply early next year because of the smaller than expected pork supply. Slower placements coupled with excellent pasture and range conditions should eventually lower the Q1 production outlook. The USDA estimated cattle slaughter came in at 120,000 head yesterday. This brings the total for the week so far to 240,000 head, down from 243,000 last week, but up from 234,000 a year ago. USDA boxed beef cutout values were down 3 cents at mid-session yesterday and closed $1.29 lower at $220.53. This was down from $222.39 the prior week and the lowest beef market since May 22nd.

Live Cattle August ’19 Daily Chart