Cattle Price Volatility

Cattle Futures

  • Mixed Performance: Live cattle futures experienced volatility throughout the week, with prices initially rising and then falling by the end of the week.
  • Cash Trade: Cash trade activity was relatively quiet, with limited transactions reported in Nebraska and Texas. Bids were passed in some areas, indicating potential buyer hesitation.
  • CME Feeder Cattle Index: The index increased slightly, suggesting positive sentiment in the feeder cattle market.
  • Beef Export Sales: Beef export sales reached a 12-week low, indicating weaker international demand.
  • Boxed Beef Prices: USDA wholesale boxed beef prices increased, which could be a positive sign for producers.

Feeder Cattle Futures:

  • Lower Prices: Feeder cattle futures faced downward pressure due to higher feed costs.
  • CME Feeder Cattle Index: The index increased, indicating optimism in the feeder cattle market despite lower futures prices.
  • Demand: Demand for feeder cattle is moderate to good, with some northern buyers absent from the market.
  • Supply: The supply of feeder cattle over 600 lbs was 76%, suggesting a good availability of heavier feeder cattle.

Overall:

  • The cattle futures market experienced mixed trends this week, with live cattle futures showing volatility and feeder cattle futures facing downward pressure.
  • Several factors contributed to these trends, including fluctuating cash trade activity, changes in boxed beef prices, export sales figures, and feed costs.
  • The market sentiment is somewhat cautious, with buyers and sellers carefully assessing the evolving market conditions.

Key Insights:

  • Live Cattle: The volatility in live cattle futures suggests uncertainty in the market, with traders closely monitoring cash trade activity and boxed beef prices. The lower export sales figures could also be a point of concern.
  • Feeder Cattle: The downward pressure on feeder cattle futures is primarily due to higher feed costs, increasing cattle feeders’ production expenses. However, the moderate to good demand for feeder cattle and the increase in the CME Feeder Cattle Index offer positive signals.
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