Volatility Strikes Live Cattle Market
In a tumultuous turn of events, live cattle prices plummeted by 1.6% to 2.2% on Friday, culminating in a significant net weekly loss of $8.20. Despite the downward spiral, the June cattle contract managed to surge past the 61.8% retracement level, clinging to it resiliently till the closing bell. Meanwhile, feeder cattle bore the brunt of the market pressure, recording losses between 2% to 2.3% across the front months. Adding to the complex tapestry of market dynamics, the USDA reported a cash action of 22.4k head averaging $183-184 on Friday, a decline from the $185-$191 range observed the previous week. The CME Feeder Cattle index also painted a somber picture, registering a $2.17 increase to $249.90 for 43.
Speculative Moves and Market Sentiments
As the cattle market continues to navigate choppy waters, the CFTC’s report on long liquidation from cattle spec traders for the week ending 4/5 further fueled uncertainty. This move left the group with a net long position of 53k contracts, the weakest seen since mid to late February. These developments highlight the fragile state of market sentiments and the impact of speculative activities on price movements.
USDA Reports and Wholesale Boxed Beef Prices
USDA’s Wholesale Boxed Beef prices portrayed a mixed picture on Friday afternoon, with Choice prices at $297.17 (+$0.02) and Select prices at $294.70 (-$1.35). The USDA’s weekly report on beef output painted a contrasting scenario, showcasing a 4.2% increase from the previous week, amounting to 513.7 million lbs. This surge came alongside a 4% rise in estimated slaughter numbers, totaling 609k head. The cumulative figures stood at 6.971 billion lbs and 8.319m head, underscoring the significant churn in the beef production landscape.
Market Closure and Price Movements
When the closing bell rang on Apr 24, the Cattle market standings revealed a bleak picture, reflecting a downtrend with Apr 24 Cattle at $178.250 (down $3.225), Jun 24 Cattle at $172.050 (down $3.800), and Aug 24 Cattle at $169.975 (down $3.350). The feeder cattle segment fared no better, with Apr 24 Feeder Cattle recording a closing price of $237.700 (down $5.000), and May 24 Feeder Cattle at $238.175 (down $5.700).
