Cattle Looks to Wednesday after Tuesday Weakness

Live cattle futures declined on Tuesday, with August futures falling $1.15 to $209.300, while feeder cattle futures recovered from midday losses to close between $2 and $2.25 higher. Last week's cash cattle trade saw prices between $220-$231 live in the North and $360-$370 dressed, while the Southern trade was lighter at $220-$222. The USDA's boxed beef report was mixed, with Choice boxes up $0.30 to $361.85 and Select boxes down $0.49 to $350.83 per hundred pounds, and Tuesday's federally inspected cattle slaughter was 114,000 head, down from the same holiday week last year.

Analysis

Live cattle futures declined on Tuesday, with contracts settling 67 cents to $1.15 lower; the August 2025 Live Cattle contract, for example, closed at $209.300, down $1.150, despite futures pulling off early weakness. In the feeder cattle complex, signals were mixed: while a market summary indicated that feeder cattle futures recovered from midday losses to close between $2.00 and $2.25 higher, specific contract data within the article showed declines, such as the August 2025 Feeder Cattle contract closing at $298.150 (down $2.225) and other near-term contracts also settling $2.00 to $2.10 lower. This discrepancy suggests either divergent performance across different feeder contracts or that the general recovery statement pertained to intraday price action rather than the net daily change for all reported contracts. The CME Feeder Cattle Index was $296.09 on May 26, down 16 cents. Last week’s cash cattle trade was reported at $230-231 live in the north and $360-370 dressed, while southern trade was lighter, from $220 to $222. A rumor regarding a case of New World screwworm caused brief early market pressure but was quickly refuted by the USDA. The USDA's National Wholesale Boxed Beef report on Tuesday afternoon was mixed: Choice boxes rose 30 cents to $361.85, while Select boxes fell 49 cents to $350.83, widening the Choice/Select spread to $11.02. Federally inspected cattle slaughter for Tuesday was 114,000 head, bringing the holiday-adjusted weekly total to 116,000 head, a figure 10,121 head lower than the comparable holiday week in the previous year, pointing to potentially tighter near-term supply.

Key Decisions for Investors

• Investors should exercise caution and anticipate continued volatility due to conflicting signals, including declining live cattle futures, divergent information on feeder cattle futures performance, and mixed boxed beef prices.
• Closely monitor USDA slaughter data, as the significant year-over-year decrease for the holiday week suggests potential supply constraints that could exert upward pressure on prices if this trend persists.
• The widening Choice/Select spread to $11.02 warrants attention for insights into consumer demand elasticity and specific supply availability across different beef quality grades.
• Focus on verified information from official sources like the USDA to navigate market sentiment, particularly given the temporary disruption caused by the quickly debunked screwworm rumor.