Cattle Weekly Comments May 10

Cattle Weekly Comments May 10

Cattle posted losses in three out of four sessions for the week ending Thursday and with the heaviest selling occurring in the feeder cattle market. Live cattle drifted lower waiting for a cash trade to develop while feeder cattle faded on a slow down in feedlot marketings which most think might slow down the demand for feedlot replacements.

Cattle opened in opposite direction to start the week as live cattle started the session firm while feeder cattle opened steady to lower and sold off from there. Live cattle were supported by last week’s cash market, which was steady at $186 on light volume. Feeder cattle were under pressure from the higher grain complex. Expectations of strong demand once the BBQ season starts added support. Feeder cattle trimmed losses late in the session from tight supplies and the expectations that supplies are only going to remain tight.

Buying emerged in the cattle market on Tuesday. Cattle opened the session higher and never really looked back. Early support came from technical buying while light support was due to support from the lower grains. Expectation that this week’s cash activity will trade steady added support. Gains were kept in check from increasing slaughter weights, which is making up for the reduction in slaughter numbers. Feeder cattle were supported by the lower corn market. Expectations that domestic demand will remain firm added support. The summer grilling season is about to get started and it seems the market is seeing less influence from the avian flu outbreak and more on tight supplies and strong economy.

Selling returned midweek as cattle opened steady to higher and spent the first half of the session trading back and forth, but selling gripped the market the second half of the session. The lack of a cash trade added pressure to the live cattle. Feeder cattle played the follower role. The lower grains and expectation of tight supplies help to limit session losses.

Both cattle contracts started Thursday’s session with gains with early support spilling over from a lower grain complex. Cattle were able to hold onto grains for the first half of the session, but just as was the case Wednesday, cattle started to fade their gains late in the session. The lack of a cash trade pressured the live cattle. Light cash activity was reported taking place at $185. Slaughter weights continue to be above expectations, which is making up for the small numbers. Last week’s beef export sales pace was estimated at 12,337 MT, which is a 7-week low.

As of May 5, pasture and range conditions were estimated at 46% g/e, 29% fair, and 25% p/vp. This compares 33% g/e last year.

For the week, June live cattle closed at $176.15 down 52.5 cents. May feeder cattle were at $238.80 down $4.50.