Rising from the Ashes: Cattle Industry Rebounds on Turnaround Tuesday

Market Reversal Sparks Hope

As the cattle market faced its lowest prices since January in H5N1 selling, the industry witnessed a remarkable resurgence on Turnaround Tuesday. Prices soared by $0.77 to $1.70, breathing new life into the sector. Despite the setback earlier in the week, the April contract is now down $3.22, showcasing the bounce-back from recent lows. Feeder cattle futures also experienced a substantial rebound, with gains ranging from $2.17 to $3.07 on Tuesday.

Confidence in Future Gains

Despite the lack of confirmed cash trade through Tuesday, the USDA’s report on cash trade from the previous week provided a glimmer of hope. Last week’s cash trade ranged from $184 to $191, with a majority of sales hovering around $186 in the South and $189-$190 in the North. With positive momentum building, the USDA’s OKC Feeder Cattle Auction Review revealed a significant uptick, with 3,148 head sold and prices climbing by $4-$8 in the heifers’ category. Notably, heifer sales constituted 44% of the total, with 63% of sales weighing over +600lbs.

Metrics on the Rise

The CME’s Feeder Cattle index reflected this upward trend, rising by 60 cents to $248.27 on 4/1. Meanwhile, the USDA reported Wholesale Boxed Beef prices weakening slightly on Tuesday, with Choice down by $1.58 to $304.16 and Select dropping $2.80 to $298.99. Despite this, the Tuesday FI cattle slaughter hit 120k head, bringing the week’s total to 229k head, a promising sign for market recovery.

Hopeful Outlook in Figures

With the market picking up steam, the figures paint a picture of resilience and progress. April 24 Cattle prices stood at $181.775, up by $1.700, while Jun 24 Cattle prices were at $176.375, a gain of $1.050. Aug 24 Cattle prices followed suit, reaching $173.125, up by $1.025. The Cash Cattle Index showed a slight dip to $184.000 from $188.00 the previous week. April 24 Feeder Cattle closed at $243.500, marking an impressive surge of $3.075, with May 24 Feeder Cattle not far behind at $244.850, up $2.175.

On this date of publication, Alan Brugler was not in possession of any positions (either directly or indirectly) in the securities referenced in this article. All data and information provided in this article are for informational purposes only. For further details, please refer to the Barchart Disclosure Policy.

The opinions articulated in this piece are those of the author and do not necessarily align with the views of Nasdaq, Inc.