Thanks to last Friday's somewhat bullish Cattle on Feed report, the cattle complex charged into Monday with a stronger tone. See Friday's Cattle on Feed report here: https://www.dtnpf.com/….

Even though the market has endured some pressure from a technical sense, it's been challenging to watch both the live and feeder cattle contracts trade lower over the last month. Traders worried about the complex being over-bought and undoubtedly some profit-taking occurred from money-managed funds; the market's fundamentals continue to remain bullish in a long-term sense. Yes, in recent weeks the cash cattle market has also traded softer as packers continue to battle red ink. But from a long-term standpoint, it's almost as if the bulls understand that even though the market's long-term trajectory remains strong compared to years past, there will be down-days in bull markets too.

Setting that thought aside, it will be especially interesting to see what this week pans out to be because: 1) There's a chance that cash cattle could trade steady to somewhat higher; and 2) If traders deem enough downward pressure has been endured for the time being, a near-term low could have been established in the market last week.

It's too early in the week to speculate where things are going to go from here, but at least the market successfully closed higher. I personally believe the feeder cattle complex has less pressure to fight compared to the live cattle complex, as its contracts closed anywhere from $3.00 to $4.00 higher Monday afternoon and aggressively blew past the market's 40-day moving average. And it would be remiss of me to not mention that last week buyer demand remained strong in the countryside. Even though parts of the Central and Northern Plains battled brutally cold temperatures and significant snow accumulation, buyer demand was strong in the countryside as the CME Feeder Cattle Index closed at $279.37 Friday afternoon.

The live cattle complex is still well below its 40-day moving average and, with packers still fighting red-margins, it's not likely they're going to increase processing speeds anytime soon. But if temperatures improve and consumers find themselves able to crack out a grill on the weekend, boxed beef prices could begin to find some support as thankfully February and its notorious weak beef demand soon will pass.

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

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