Cattle futures surged on Friday after a push above key levels drove technical buying. March feeder cattle traded $7.62 higher to close at $352.95 per cwt. The contract also traded $12.52 higher than last Friday. Prices have been grinding higher on declining volatility for nearly a month, which has supported the current uptrend from the November lows.

Cash feeder cattle prices had an eye-catching week, leading to the CME Feeder Cattle Index pushing above $350. Strong feeder cattle prices have been indicative of tight supplies.

Screwworm was detected on another farm in Mexico that was about 250 miles from the U.S.-Mexico border. The recent close detection of the pest reaffirms the notion that the U.S. won’t reopen the border to cattle imports from Mexico anytime soon.

Friday’s feeder cattle breakout drew additional buyers into the live cattle market. February live cattle traded $4.40 higher to $236 per cwt. Prices were able to breakout above their sideways range and close at the highest level since Oct. 23.

The Commitment of Traders data showed that money managers increased their net long position by 3,390 contracts during the week ending Dec. 23 to 60,609 contracts. Funds haven’t been a lot of length on the current run, which could give them more fuel for additional buying on a price dip. 

—

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