Cattle Futures Soar: Will Live and Feeder Markets Keep Climbing?
Late July market winds are shifting as cattle futures hit fresh highs. Feeder contracts broke records, live cattle futures rebounded from June lows, and boxed beef prices edged upward-raising questions about whether this rally can sustain momentum into August.
On Tuesday, August live cattle futures rose $4.07 to $219.97, while October gained $3.87 to settle at $216.82. The market momentum extended to feeders, where August feeder cattle closed $5.40 higher at $319.12, and September rose $5.65 to $319.17. The CME Feeder Cattle Index increased to $312.04, reflecting continued strength in the countryside.
Cash Trade Stagnates
Despite bullish futures, cash cattle trade was limited. Only 607 head traded at $235 on negotiated sales. Formula-based purchases, totaling 30,800 head, averaged $364.01 with an average weight of 909 lbs. Asking prices stood at $226+ in the Southern Plains and $240 in parts of western Iowa, but no widespread cash trade had developed by Tuesday.
Analyst ShayLe Stewart noted that while buyers remain eager, packers are sitting on ample inventory, potentially delaying further trade activity.
Boxed Beef Strength
USDA boxed beef cutouts showed continued strength:
Choice cutout: +$2.06 to $393.04
Select cutout: +$0.93 to $378.46
The daily estimated cattle slaughter was 118,000 head, down 2,000 from the previous week, suggesting some supply-side tightening.
Regional Auctions
At Tulsa Livestock Auction, 702-lb steers averaged $345.60/cwt, up $10-$15 from the previous week. Heifer calves rose $5-$10, while bulls remained steady, reflecting sustained buyer demand.
Grain Market Influence
Corn prices continued to ease, offering relief to feedlot operators:
July corn futures: down $0.07 to $4.11
September corn futures: down $0.05 to $3.98
Cheaper feed inputs are bolstering feeder cattle optimism and margin potential.
Outlook: Momentum vs. Market Saturation
The combination of rising beef prices, lower feed costs, and optimistic futures has created a bullish tone in livestock markets. However, analysts warn that with packers well-stocked and cash trade thin, the rally may need fresh demand or further tightening in slaughter to maintain its trajectory.
Producers are advised to monitor:
Cash trade developments later this week
Slaughter volume adjustments
Grain price fluctuations
Boxed beef demand into late July and August