April Contracts Up, Surrounding Months Weaken
Embattled with fluctuating prices, the live cattle futures market faced a challenging day on Thursday. While April fats managed to climb by 57 cents, other nearby contracts faltered, closing 27 to 47 cents weaker. In a startling twist, June futures now hold a $3.87 discount to April. The USDA’s confirmation of 59k head of cattle sales on Thursday, ranging from $187 to $191.50, revealed a market teetering on uncertainty. Southern bulk action saw a meager +$2 near $188, while the North mostly hovered near $190.
Feeder Cattle Futures Struggle
Feeder cattle futures didn’t fare much better, closing the day with losses ranging from 30 to 80 cents across the front months. However, March offered a glimmer of hope, up 62 cents to tighten the spread with the index. The CME Feeder Cattle Index experienced another 41 cents uptick on 3/20, reaching $251.82.
Anticipated Reports Spark Concern
Traders anxiously await NASS’s report on March 1 feed at 11.79m head, a potential 0.9% uptick from last year. February placement estimates range from 4.5% to 8.8% higher compared to Feb ’23, while marketings for February are anticipated to be 3.8% over last year on average. The impending COF report set for release on Friday afternoon adds to the growing tension in the market.
Export Sales and Beef Prices
USDA’s Export Sales report highlighted beef sales at 11k MT for the week of 3/14, slightly lower than the previous week’s 11.2k MT and a significant drop from the 18.6k MT sold during the corresponding week last year. Additionally, beef commitments hit 290.9k MT, lagging 8% behind last year’s pace. Meanwhile, the Wholesale Boxed Beef prices saw an increase with Choice at $313.73 and Select at $303.73 on Thursday afternoon. Choice was up by 29 cents, while Select improved by $1.02 cwt.
Final Numbers Recap
As the day drew to a close, the figures painted a challenging picture for livestock investors –
Apr 24 Cattle closed at $188.375, up $0.575
Jun 24 Cattle closed at $184.500, down $0.275
Aug 24 Cattle closed at $183.275, down $0.425
Mar 24 Feeder Cattle closed at $250.875, up $0.625
Apr 24 Feeder Cattle closed at $254.625, down $0.300
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
