Daily Livestock Report, Vol. 14, No. 154 / August 5, 2016. www.DailyLivestockReport.com

Feeder cattle futures have been on a tear recently and yesterday almost hit $150/cwt before retreating. Still the nearby contract settled higher for the day and it is up $7.5/cwt (+5.4%) for the week. Demand for feeders shows some improvement given gains in fed cattle values and lower corn prices. Current feeder futures hold a nice premium over what fed/corn values imply, evidence in our view that markets are counting on a) continued expansion of the cattle herd (fewer heifers available for feeding); b) a large negative basis for corn (already a reality in some areas and could get worse in the fall); c) further growth of the farmer‐feeder sector as producers look for ways to add value to their crops (this is a corollary of point b.); and a reflection of above average pasture conditions. Full report can be found here Feeder_Futures_Up.