Cattle Roundup– 04/22/24

Cattle Market Breakdown

The cattle complex is in a holding pattern today, and the market sentiment is mixed. 

• Live Cattle Futures: April contracts are trading slightly lower around the $180.00/cwt mark, hinting at weakness. However, June contracts are seeing a slight uptick, hovering around $178.50/cwt. This mixed picture suggests indecision in the market right now.
• Feeder Cattle Futures: May feeders are under some pressure, down slightly at around $205.00/cwt. This could point towards short-term bearishness in the feeder market.
• Cash Market: Cash markets are relatively steady compared to last week. Depending on your region, expect between $155.00-$160.00/cwt for fed cattle. This steadiness might be temporary as the market waits for more direction.

Factors We’re Watching

• Cattle on Feed Report: The recent COF report has created uncertainty. However, analysis suggests that while the overall herd decline was expected, the actual numbers are causing reassessments. We’re waiting to see if this points toward a longer-term supply shortage, which could be bullish.
• Grain Prices: Corn futures, a key component of cattle feed, are stable at slightly lower levels. If the trend holds, this could offer some reprieve for feeders. Keep an eye on ongoing weather reports in key growing regions, which will be a significant factor in grain prices and, consequently, the cost of cattle feed.
• Beef Demand: Demand remains a concern. While exports are showing some positive signs, inflation still impacts consumer choices. Any news of weakening demand could lower future prices.
• Weather: Spring weather can be volatile at this time of year. Severe droughts in certain production areas could impact herd sizes and feed costs, potentially creating significant volatility in the market.

Trading Outlook

The cattle market feels poised for a shift, and while the direction is unclear, this uncertainty presents potential opportunities. The current approach would be cautious but keen for short-term swings in the live cattle futures, particularly the June contract.