The cattle market witnesses contrasting trends as feeder cattle prices soar while cash cattle trade remains steady. Lower corn prices, resulting from recent rains in the Corn Belt, serve as a catalyst for the impressive rally in feeder cattle prices. Feeders surge by $2 to $10, while calf prices exhibit a mixed pattern, ranging from $3 lower to $5 higher.
Conversely, wholesale beef prices experience a decline during the week. Choice boxed beef concludes at $227.72 per hundredweight, marking a $6.29 decrease, while Select finishes at $293.63 per hundredweight, down by $6.33.
Optimism reverberates in the Chicago Mercantile Exchange (CME), as cattle futures respond positively to stabilizing cash and wholesale prices, in addition to the favorable reaction to the corn breakdown. The June contract closes at $181.50, representing a $1.75 increase, while the most-active August jumps $2.675 to $177.175, accumulating a weekly gain of $6.40. Feeder futures witness an impressive surge of $5.20, hitting a fresh all-time high for nearby feeder futures at $247.575. This surge results in a significant weekly increase of $13.625.
Despite bearish expectations surrounding cash and wholesale weakness, the cattle market remains resilient. The August live cattle contract concludes the week with a high close at $177.125, indicating the potential for a rebound. The relative elevation of the choice cutout, compared to historical context, suggests the possibility of a future recovery.
While the average cash cattle price slightly dips compared to the previous week, the nearby futures discount aligns with historical norms, implying potential firmness in cash cattle prices during the midsummer period.
The anticipation of relatively inexpensive feed due to the substantial corn acreage number and bearish futures reaction propels feeder futures to new heights. Technical indicators further support the positive momentum in feeder cattle prices, painting a promising picture for the market.
Source : wisconsinagconnection