Cattle futures extended their rebound on Thursday, with feeder cattle trading in a key technical area. January feeder cattle surged $5 today to close at $343.40 per cwt. Prices cleared the $340 technical area, which was the bottom of a gap established by the sharp selloff in late October. The top end of the gap lies at $341, which could serve as another area of resistance.

Live cattle futures also gapped open higher this morning and remained strong throughout the session. February live cattle traded $2.42 higher to close at $230.95, the highest close since Oct. 24. The anticipation of higher cash this week likely drove the rally, though cash trade has been slow to develop. There was some cash trade in the north yesterday at $224-225, which was slightly higher than last week. Bids emerged in the south today, though no trades were confirmed.

Weekly export sales remain disappointing, with sales for the week ending Nov. 13 totaling just 6,800 metric tons (MT), which was the lowest since the first week of January. Physical exports were up sharply this week but remained well below last year and the five-year average.

U.S. beef exports totaled 80,800 MT in September, according to delayed U.S. Census data on Thursday. Year-to-date shipments are running 11 percent behind last year. Sharply lower shipments to China have driven the decline, with exports sitting 57 percent behind last year. China’s government never renewed export registrations for U.S. beef processing facilities that expired last year.

China had been a major beef export destination emerging from the Covid-19 pandemic. However, declining U.S. supplies pushed China to Brazil, which has been a reliable beef supplier. Strong domestic demand has likely helped lessen the blow of China’s absence, as boxed beef values remain well above year-ago levels.

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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.