Feeder cattle futures continue to set new historical highs. Prices for March contracts in Chicago closed trade on Tuesday at 125.40 per hundred weight, surpassing the previous high set on December 30th.

"What I see in the charts, every now and then prices move up to new, higher trading ranges...it looks like they're starting to move higher at the moment," says David Drozd, president and senior market analyst with Ag-Chieve Corporation. "I'd say we're on our way. Otherwise, it's tried. It may pull back further, but at least it's trying."

"I believe that if you've got cattle ready to go, selling some at historically high prices is not a bad thing to do," he says.

However, record high prices in Chicago don't necessarily mean producers in western Canada are getting that money in their pocket.

"It's always hard to figure out what that means. That feeder basis is a wildcard. It's just hard to predict our feeder prices off of the futures. There are so many variables, whether it's the Canadian dollar, the different cost-of-gain or the feedlots, but it is part of the overall positive outlook on prices," says Brian Perillat, senior analyst with CanFax.


The February live cattle contract in Chicago also set a new contract high on Tuesday. Closing at 109.05 per hundred weight.


~ Wednesday, January 12, 2011 ~