Cattle Back to Higher Trade as Cash Strength Continues

Live and feeder cattle futures are rising, with live cattle up $1.55 to $2.05 and feeder cattle up $4.10 to $4.20, as cash trade shows Southern sales at $221-222 and Northern bids at $231. A federal trade court ruled President Trump's liberation day tariffs illegal, ordering a halt within 10 days, though the White House is appealing. Wholesale boxed beef prices are also up, with Choice boxes at $366.67 (+$1.25) and Select at $352.93/cwt (+$1.19), while Wednesday's federally inspected cattle slaughter totaled 119,000 head, bringing the weekly total to 235,000, down 15,266 from last year's holiday week.

Analysis

Live cattle futures are demonstrating significant upward movement, with gains of $1.55 to $2.05 across various contracts, such as the Jun 25 contract trading at $215.475. This bullish sentiment extends to feeder cattle futures, which have rebounded sharply by $4.10 to $4.20, with the August 25 contract reaching $299.800. Physical market activity reinforces this trend, evidenced by Southern cash sales at $221-222, Northern bids at $231, and Fed Cattle Exchange auction sales ranging from $222 to $225.50. While the CME Feeder Cattle Index for May 27 registered a modest decline to $295.84, the more current futures rally and strong cash markets suggest prevailing positive momentum. A key external development is a federal trade court's ruling that President Trump’s 'liberation day tariffs' were illegal, mandating a cessation process within ten days; however, this is subject to a White House appeal, creating a degree of uncertainty. Further supporting the market, USDA’s National Wholesale Boxed Beef report indicated higher prices, with Choice boxes up $1.25 to $366.67 and Select boxes increasing $1.19 to $352.93, maintaining a Choice/Select spread of $13.74. Supply-side data also appears supportive, as the weekly federally inspected cattle slaughter of 235,000 head is notably 15,266 head below the figure for the comparable holiday week last year, indicating tighter cattle availability.

Key Decisions for Investors

• Investors should closely monitor developments regarding the federal court's tariff ruling and the White House appeal, as the outcome could significantly influence cattle market sentiment and trade dynamics.
• The current strength in futures, cash cattle, and wholesale beef prices, combined with a year-over-year reduction in slaughter rates, points to a fundamentally supportive environment for cattle prices in the near term.
• While bullish momentum is evident, traders should consider potential volatility stemming from the tariff dispute and factor in the appeal process when assessing risk for positions in live and feeder cattle futures.