Cattle futures in Chicago posted a second straight weekly gain. The October feeder cattle contract closed the week of 7 September up $12.35 at $332.50 per hundredweight, and October live cattle rose $6.73 to $219.68, after a stretch of declines that had taken both markets well below the cash trade.

Andrew Griffith, professor of agricultural and resource economics at the University of Tennessee Institute of Agriculture, said the rebound looked like the market correcting its "overreaction to all of the negative news the past few weeks" rather than a response to any single piece of information. Futures would probably keep recovering for a week or so, he said, but "folks should not expect prices to make a record run."

David Anderson, extension economist at Texas A&M University, pointed to time and adjustment after the sell-off, adding that "the fundamentals still indicate tight supplies." Cash prices rose through the week with heavy sales late in the week and stayed above nearby futures, he said, and corn prices remained an important factor for the feeder market after USDA again trimmed its yield forecast.

Tim Petry, extension livestock marketing specialist at North Dakota State University, said the market had been oversold at $6 to $7 per hundredweight under the fed cattle cash price, which encouraged buying and then short covering during the holiday-shortened week of 8 to 11 September. Corn futures topping out under harvest pressure also supported feeders, he said, although uncertainty over the size of the corn crop would keep that market volatile.

In the northern Plains, Petry said, auction volumes had picked up with big runs of 700- to 950-pound steers and heifers coming off grass, and some markets reported prices $10 per hundredweight higher for high-quality northern cattle given the smaller supplies expected this year. The CME Feeder Cattle Index, which had slid from $370 at the end of May to about $327 in the week of 4 September, rose every day to reach $331.22 on Thursday.

The next test is USDA's monthly Cattle on Feed report due on 18 September, which analysts expect to show August feedlot placements down about 4% from a year earlier. Reporting by Cassidy Walter.

Source: Successful Farming