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Market Swings: Feeder Cattle Dips Post CoF Report Revelations

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Friday Shake-up

Trading on Friday tipped the scales for feeder cattle, dragging values down significantly with a weighty loss of $5.57 at the low point. While futures managed a slight recovery by the closing bell, the overall slump persisted with prices down by $3.12 to $4.30. Fat cattle also took a beating, plummeting into triple digits on Friday with losses ranging from $0.87 to $1.77.

CoF Report Impact

The CoF report stirred the pot further, pushing futures to a net lower standing for the week. June fats experienced a dolorous drop of 70 cents Fri/Fri, while May feeders were dealt a harsher blow, down by $2.22. USDA’s update on the cash trade for the week highlighted that most trades hovered around $188 in the South, marking a $2 bump from the previous week, and around $190 in the North. Notably, the CME Feeder Cattle Index ticked another 41 cents higher on 3/20 to $251.82.

CFTC Data Insights

The weekly CFTC data indicated a shift among cattle spec traders in the week ending 3/19. Contrarily, funds emerged as net buyers in feeders for the week, boosting their net long position by 1,114 contracts to 11,453. This change left cattle spec traders with 920 contracts less, landing them at 62,391 in net long positions.

CoF Update Summary

The NASS CoF update revealed a headcount of 11.838 million on feed as of March 1st, showing a 1.3% uptick compared to Mar ’23—exceeding the expected 0.9% increase. Likewise, placements outpaced expectations with 1.89 million head placed in February, a significant 9.7% increase year-over-year. Marketings in February stood at 1.793 million head, reflecting a 3.4% rise from the previous year.

Beef Market and Slaughter Data

USDA’s Wholesale Boxed Beef prices saw a decline on Friday, with Choice grades down by $3.01 and Select weaker by $2.26. The weekly beef output dipped to 500.4 million lbs, marking a 1 million lb decrease from the previous week—showing a 2.5% drop from the same period last year. Cattle slaughter figures for the week hit 598k head, 3k head below the previous week and 4.8% less than the corresponding week last year. Year-to-date totals for beef production showed a decrease to 5.96 billion lbs and 7.133 million head, compared to 6.211 billion lbs and 7.54 million head last year.

Closing Numbers

Apr 24 Cattle  closed at $187.500, down $0.875,

Jun 24 Cattle closed at $182.900, down $1.600,

Aug 24 Cattle closed at $181.500, down $1.775,

Mar 24 Feeder Cattle closed at $249.950, down $0.925

Apr 24 Feeder Cattle closed at $251.500, down $3.125

As of the publication date, Alan Brugler did not have any positions in the securities mentioned. The information provided in this article is for informational purposes only. For additional details, please refer to the Barchart Disclosure Policy.

The expressed views and opinions are solely those of the author and may not align with Nasdaq, Inc.’s perspectives.