Cattle Rallies Back on Thursday as Cash Strength Continues

Live cattle futures rose between $1.60 and $2.075, while feeder cattle futures increased $4.25 to $4.40 following a rebound in the CME Feeder Cattle Index, which was up $1.91 to $297.75 on May 28. Cash trade saw Southern sales at $221-223 and Northern sales at $234-235, with boxed beef prices also increasing, as Choice boxes rose 67 cents to $366.09 and Select boxes increased $1.90 to $353.64/cwt; cattle slaughter was down 18,778 head from the same holiday week last year.

Analysis

The cattle market exhibited significant upward momentum, evidenced by gains in live cattle futures ranging from $1.60 to $2.075 across different contract months, such as the Jun 25 contract closing at $215.525 (up $1.600) and the Oct 25 contract at $208.150 (up $2.075). Cash cattle transactions reflected this strength, with sales reported at $221-223 in the South and $234-235 in the North, and Fed Cattle Exchange online auction sales occurring between $222-225.50 for a portion of the offered head. Feeder cattle futures experienced a more substantial rebound, with contracts climbing $4.25 to $4.40; for instance, the Aug 25 Feeder Cattle contract closed at $299.925, up $4.300. This was supported by the CME Feeder Cattle Index, which rose $1.91 on May 28 to an average price of $297.75. Bullish sentiment extended to the wholesale beef market, where USDA’s National Wholesale Boxed Beef report showed Choice boxes up 67 cents at $366.09 and Select boxes $1.90 higher at $353.64/cwt, widening the Choice/Select spread to $12.45. However, federally inspected cattle slaughter for Thursday was 120,000 head, bringing the weekly total to 355,000 head, a decrease of 18,778 head compared to the same holiday-affected week last year, suggesting potentially tighter near-term supply. Adding a layer of market uncertainty, an appeals court issued a temporary stay on a federal trade court ruling that had deemed President Trump’s liberation day tariffs illegal.

Key Decisions for Investors

• Given the broad-based price increases in live cattle futures (up $1.60-$2.075), feeder cattle futures (up $4.25-$4.40), and wholesale boxed beef prices (Choice up 67 cents, Select up $1.90), investors might consider maintaining or initiating long positions in cattle-related commodities, anticipating continued bullish sentiment.
• Investors should closely monitor upcoming cattle slaughter figures and inventory reports, as the current year-over-year decrease of 18,778 head in weekly slaughter, if indicative of a trend, could signal sustained market tightness and further price support.
• The temporary legal stay on the tariff ruling introduces regulatory uncertainty; market participants should track these legal proceedings closely, as definitive outcomes could significantly impact international trade flows and domestic cattle market pricing.