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Cattle Markets Continue to Impress
If you would like to receive more information on the commodity markets, please use the link to join our email list -Sign Up Now For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, April 22, 2025, at 3:15 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar. May Feeder Cattle gap opened higher and broke down to the low at 284.925, closing the gap. The market settled in and then grinded higher the rest of the session to the high at 286.975. It settled near the high at 286.85. The rally took price past resistance at 286.55 and it was able to settle above resistance. This puts feeders in a position to test resistance at 288.00 and the recent April 2nd high at 288.40. The feeder cash market has once again taken off this week and today’s feeder index print was a new all-time high at 293.57. This puts the May Feeders at a discount to the index and could set up a rally to test the all-time high futures price at 290.625. I don’t believe the Cattle on Feed report will have any material impact on price on Monday. You could consider the placements figure slightly bearish with the higher print than the analysts’ expectations but the marketings number was also slightly higher. The on-feed number is in line with the guesses, in my opinion. We have less cattle in the feedlots than last year at this time. See report summary below. Feedlots have been very aggressive in their pursuit of feeder weight cattle and the weight categories continue to set new high prices in all weight classes which has been extraordinary. Can this continue? We’ll see!... Feeders broke with the 80- 20 gap rule, siding with the 20 % and going against the direction of the gap as the Live cattle market rallied and of course the feeder market continues to be strong. A rally past the Thursday high could see a test of resistance at 288.00 and the April 2nd high at 288.40. The all-time high is next at 290.625. A breakdown from 286.55 could see price test support at the 282.35. The Feeder Cattle Index surged and is at 293.57 as of 04/16/2025. (New All-time high for the index) June Live Cattle opened higher and broke down to the low at 202.225. It reversed course and rallied the rest of the session to the high at 204.35. It settled near the high at 204.075. The rally took price past resistance at 203.50 and the gap created from the April 3rd low at 203.70 to the April 4th high at 203.15. It is still close to the gap that the 80- 20 gap rule could come into play, where the market usually turns in the direction of the gap. The strength in futures was in spite of the upcoming Cattle on Feed report as the market usually consolidates or turns lower as traders lighten their positions in front of the report. But the cash market was abuzz with producers looking for higher prices and the packer was on the old producer’s position of asking where are you on price? Packers are struggling with their producers and the retail industry as it seems they have lost control of the marketplace on both ends. The producer looks like he feels he doesn’t have to sell cattle this week or probably even next as feed costs and supplies are in their favor. Cash traded higher on Thursday keeping producers in control. The retailer doesn’t want to pay higher prices and except for occasionally paying up have been able to keep prices at bay as we near the grilling season. The lower slaughter rates haven’t helped the packer much as the hefty cattle weights are providing enough production to keep supply to the retailer near the previous year’s level. The good for the packer is he is able to sell more prime and choice meats as the cattle grade better than ever with select becoming somewhat of a niche market as its supply diminishes. Exports were in better shape and this keeps the packer in the market to buy meat because they don’t want to lose market share, in my opinion. What can the packer do to get control of the market? They can import more beef or cattle or close plants? There are new plants coming online which should provide competition[BD1] to the established parties as they attempt to ramp up operations. So, if they decide to shut down a plant could they lose market share to the new arrivals? Whatever they do will likely bite them at some point because the limited supply of cattle could get tighter once rebuilding the herd starts. The cattle on feed report showed steers at 62% of the population and his indicates to me that the status quo is still in place and rebuilding hasn’t gained much traction. There is still drought in a lot of places which likely needs to turn around to get rebuilding going. What will happen to price once rebuilding gets under way? The pressure is on the packer, in my opinion. We’ll see!... If price trades l below support at 203.50 it could pullback and test support at the rising 21-DMA now at 201.45. If price can hold settlement, it could resistance at 205.55. Resistance is next at the double top all-time high at 207.725. Boxed beef cutouts were mixed as choice cutouts decreased 0.63 to 332.90 and select increased 2.00 to 316.39. The choice/ select spread narrowed and is at 16.51 and the load count was 143. Thursday’s estimated slaughter is 120,000, which is above last week’s 114,000 and last year’s 118,157. The estimated slaughter for the week is 477,000, which is above last week’s 463,000 and below last year’s 486,297. The USDA report LM_Ct131 states: So far for Thursday, in the Texas Panhandle, negotiated cash trade and demand have been moderate. Compared to last week, live FOB purchases traded 4.00 higher at 208.00. In Kansas, Nebraska and the Western Cornbelt, negotiated cash trade has been limited on light- moderate demand. Not enough purchases for a full market trend. Last week in Kansas, live FOB purchases traded at 204.00. For the prior week in Nebraska and the Western Cornbelt, live FOB purchases traded at 208.00 and dressed delivered purchases from 327.00-328.00. The USDA is indicating cash trades for live cattle from 208.00 to 212.00 and from 332.00 – 335.00 on a dressed basis (so far). United States Cattle on Feed Down2 Percent Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.6 million head on April 1, 2025. The inventory was 2 percent below April 1, 2024. The inventory included 7.26 million steers and steer calves, down slightly from the previous year. This group accounted for 62 percent of the total inventory. Heifers and heifer calves accounted for 4.38 million head, down 4 percent from 2024. Placements in feedlots during March totaled 1.84 million head, 5 percent above 2024. Net placements were 1.79 million head. During March, placements of cattle and calves weighing less than 600 pounds were 335,000 head, 600-699 pounds were 285,000 head, 700-799 pounds were 475,000 head, 800-899 pounds were 506,000 head, 900-999 pounds were 175,000 head, and 1,000 pounds and greater were 65,000 head. Marketings of fed cattle during March totaled 1.73 million head, 1 percent above 2024. Other disappearance totaled 55,000 head during March, 4 percent below 2024. **Call me for a free consultation for a marketing plan regarding your livestock needs.** Ben DiCostanzo Senior Market Strategist Walsh Trading, Inc. Direct: 312.957.4163 888.391.7894 Fax: 312.256.0109 Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member. 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