Live Cattle Futures Decline Amid Risk-Off Trading Strategy
Live cattle futures are experiencing a decline at Thursday’s midday mark as traders opt to reduce risk exposure. Contracts have dipped between $2.10 and $3.05 in nearby months. Cash trading has been sluggish this week, with bids reported at $208 in the South and $212 in the North. Notably, the recent Fed Cattle Exchange online auction from Central Stockyards had 614 head listed but recorded no sales, with bids ranging from $205 to $207. Feeder cattle futures are also down, with losses between $3.85 and $4.65 at midday. The CME Feeder Cattle Index rose by 25 cents on April 31, averaging $291.27.
Impact of New Tariffs on U.S. Beef Market
The recently announced “Liberation Day” tariffs, effective April 9, affect several trading partners. While Mexico and Canada are exempt from these tariffs, reciprocal duties are imposed on Japan (24%), South Korea (25%), and China (34%, or 54% including earlier tariffs). For importing countries, Australia and Brazil have been set at a baseline tariff of 10%.
Beef Export Sales and Monthly Export Data
The latest Export Sales data indicates that beef sales reached 9,261 metric tons (MT) for the week ending on March 27, an improvement over the previous week. South Korea accounted for 3,400 MT, while Japan purchased 2,600 MT. Total shipments amounted to 14,878 MT, with South Korea as the largest destination at 5,200 MT, followed by Japan at 3,300 MT.
According to this morning’s census trade data, a total of 227.4 million pounds of beef was exported in February. This figure represents a decrease of 6.9% compared to last year and a drop of 1.2% from January’s totals.
Market Conditions and USDA Reports
The USDA’s Thursday morning National Wholesale Boxed Beef report was mixed. The Choice/Select spread widened to $21.52. Prices for Choice boxes were up by 43 cents to $340.33 per hundredweight, while Select boxes fell by 2 cents to $318.81. Furthermore, Wednesday’s federally inspected cattle slaughter reached an estimated 124,000 head, bringing the weekly total to 351,000 head. This figure is 15,000 head lower than the previous week and down 1,505 from the same week last year.
Current Price Summary
Apr 25 Live Cattle: $208.275, down $2.100
Jun 25 Live Cattle: $204.625, down $2.775
Aug 25 Live Cattle: $200.875, down $3.050
Apr 25 Feeder Cattle: $285.025, down $3.850
May 25 Feeder Cattle: $283.275, down $4.650
Aug 25 Feeder Cattle: $289.375, down $4.325
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any securities mentioned in this article. All information and data provided are for informational purposes only. For further details, please review the Barchart Disclosure Policy here.
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