Cattle Weekly Comments June 7

Cattle Weekly Comments June 7

Cattle continued the trend from the previous week, trading lower. The front month June live cattle contract held up this week as it has tied itself to the cash trade but the deferred months in live cattle and feeder cattle came under pressure early and often. This week’s selling pressure was tied to another avian flu outbreak (this time in IA and MN). The lack of a cash trade added selling pressure.

Cattle started the week in the opposite direction with live cattle higher while feeder cattle were lower. Cattle opened the session lower across the board and extended the losses throughout the early half of the session. Early selling was tied to last week’s disappointing cash trade, which took place at $190, down $2 from the previous week. Concerns about the economy added selling pressure. Light pressure also came from a stronger grains complex, but once the grains faded into the red, cattle staged a bit of a recovery. Boxed beef prices were firm, which is a good sign of domestic demand.

Minor selling gripped the cattle markets on Tuesday as cattle opened the session higher but faded through mid-session, rallied through the noon hour, but then faded into the close. The lack of a cash trade pressured the live cattle. Feeder cattle played a follower role, following the live cattle market. Economic concerns remain as traders are showing concerns toward the direction that the Fed might take in next week’s Fed meeting.

Selling pressure continued midweek as cattle once again opened the session steady to higher and held gains from the first part of the day but then fell lower in what continues to appear to be a risk off attitude in the ag sector. Light selling was tied to a disappointing cash trade. Feeder cattle followed the live cattle again. Boxed beef prices were lower, which added to the selling pressure.

Avian flu concerns ramped up again toward the end of the week as reports of more dairy herds have contracted the flu, this time in IA and MN. Reports of a dairy farm worker in Mexico with avian flu has died (he also had other major health related issues) added to the pressure. The front month June held gains as it tries to stay in line with cash. Last week’s disappointing export sales estimate did not help cattle as last week’s sales were reported at 14,500 MT, 8% below last week. Feeder cattle were under pressure from a stronger corn market.

As of June 2, pasture and range conditions improved 3% to 51% g/e, 30% fair, and 19% p/vp.

For the week, June live cattle closed at $182.175 up 62.5 cents. August was at $254.925 down $1.475.