Live Cattle Futures Experience Modest Gains Amid Mixed Cattle on Feed Report
Live cattle futures rose moderately as traders anticipated the Cattle on Feed report, closing up 15 to 35 cents in the front months. February futures ended the week with a slight increase of 7 cents. This week, cash trading remained sluggish, with sales around $199 in the South and $199-200 in the North, marking a drop of $3-4 from the previous week. Feeder cattle bucked the trend with gains between 85 cents to $1.17 at closing, with March futures climbing $1.60 for the week. The CME Feeder Cattle Index reported a slight increase of 2 cents, reaching $278.84 on February 20.
Key Insights from the Cattle on Feed Report
Friday’s Cattle on Feed report revealed that January placements rose 1.73% year-over-year to 1.822 million head, falling short of the anticipated 2.2% increase. Marketings for the month also exceeded expectations, climbing 1.41% to 1.869 million head, compared to predictions of a 2.1% rise. Meanwhile, the inventory of cattle on feed as of February 1 decreased by 0.69% to 11.716 million head, slightly better than the expected 0.8% reduction.
Trends in Managed Money Positions
According to CFTC data, speculators reduced their net long positions by 7,240 contracts during the week ending Tuesday, bringing the total to 128,469 contracts. Conversely, managed money in feeder cattle maintained a record net long position of 30,069 contracts, marking an increase of 1,702 contracts from the previous week.
Increasing Beef Export Sales
Beef export sales surged to 21,481 metric tons (MT) for the week ending February 13, representing a staggering 64% increase from the prior week. Japan accounted for a substantial portion, purchasing 9,800 MT, while South Korea received 3,400 MT. However, export shipments dropped to a four-week low of 14,193 MT, with Japan still leading as the biggest destination at 4,100 MT, followed closely by South Korea at 3,800 MT.
Wholesale Beef Prices and Slaughter Estimates
The National Wholesale Boxed Beef report released on Friday showed a decline in prices. The Choice/Select spread narrowed to $8.21, with Choice boxes decreasing by $1.86, now priced at $310.77 per cwt. Select boxes fell 62 cents, settling at $302.56. The USDA’s cattle slaughter estimate for the week was approximately 563,000 head, a slight increase of 2,000 head from the previous week, though still 27,486 head lower than the same week last year.
Closing Prices for Cattle Futures
Feb 25 Live Cattle closed at $197.825, up $0.200.
Apr 25 Live Cattle closed at $193.950, up $0.150.
Jun 25 Live Cattle closed at $190.325, up $0.350.
Mar 25 Feeder Cattle closed at $267.950, up $1.125.
Apr 25 Feeder Cattle closed at $267.550, up $1.175.
May 25 Feeder Cattle closed at $265.925, up $0.850.
On the date of publication, Austin Schroeder 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. For more information please view the Barchart Disclosure Policy here.
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