After what felt like an eternity, as the cattle contracts traded lower for nine straight days, traders on Monday shook the bearish attitude that had taken over the sector and let the contracts rally full steam ahead.

Helping add bullishness to the marketplace was Tyson's announcement that broke early Monday morning that the company intends to fully reopen their second production shift at their Amarillo, Texas, beef facility by summer of 2027. The reopening of the Amarillo second shift will increase production and hopefully help keep product steadily available to consumers, and fed cash cattle supplies manageable. Click here to read the official news release: https://www.tysonfoods.com/….

By Monday's close, the live cattle contracts had rallied anywhere from $2 to $3 higher, and the feeder cattle contracts had rallied anywhere from $5 to $6 higher. Both the live cattle and feeder cattle markets are both trading well below their 100-day moving averages, but if the market is able to keep this bullish sediment throughout the week, then maybe the market's luck will turn around.

If the market is indeed able to trade steady to somewhat higher, it will likely be a technical decision, as it's unlikely that the fed cash cattle market will be able to lend much support this week. In recent weeks, packers have been able to build up their inventory, which lessens their need to participate in the cash market in the coming weeks, and front-end supplies of market-ready cattle are sizeable.

Last week, packers were able to purchase 69,555 head in the negotiated cash cattle market. Of that, 72% (49,988 head) were committed to the market's nearby delivery option, while the remaining 28% (19,567 head) were committed to the market's deferred delivery option. Last week, Southern live cattle traded at mostly $216 to $218, which is $6 to $8 lower than the previous week's weighted average. Northern dressed cattle traded at mostly $340, which is $12 lower than the previous week's weighted average.

It's too early in the week to tell if Monday's action will have a snowball effect on the rest of the week. However, following the nine straight days of lower trade that the market just endured, any day the market can close higher is a good day.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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