June Live Cattle futures were up $4.075 for the week, settling at $178.45/cwt. Which is a noteworthy level. The 200-day moving average is $179/cwt, the 100-day moving average is $178.5/cwt and the 50% retracement level is $178.4/cwt.

The 50% retracement coming from the contract highs put in at $194/cwt on Sept. 15 to the lows of $162.775/cwt on Dec. 6. All three of these levels were hit today – on a Friday – with a positive close.

The last three weeks of weather have been extreme for large portions of cattle-feeding country. Multiple rounds of cold, blowing snow with sprinkles of freezing rain in between for some and now several getting a closing round of rain this week to leave things a sloppy mess. Less than ideal conditions is an understatement.

Carcass weights were down 10 pounds from the previous week at 927 pounds, according to the USDA, still historically heavy but a big one-week drop. It’s unlikely that carcass weights climb back to previous levels in the next month as it will take time to get the pounds lost in the poor weather put back on (for the ones that made it through).

Managed money (funds) had maintained historically large net long positions in the live cattle trade through most all of 2023 until Sept. 26. According to the Commitment of Traders (COT) report on Sept. 26, managed money was long 101,860 contracts of Live Cattle Futures and the market had peaked a week earlier. The most recent (COT) report showed Managed Money long just 13,770 contracts as of Jan. 15.

The milk turned sour in September for the funds holding long positions. The fundamental narrative for bullish cattle prices didn’t change necessarily, but the timeline did with Cattle on Feed reports not reflecting tightening supplies when they were expected.

Everything bullish was pushed out further on the horizon and the bridge became too far. If new highs are to be put in, the funds will need something fresh to erase the sour memory of the 2023-fourth quarter. The recent weather, while terrible for livestock producers, may be a palate cleanser for the funds.