In a recent analysis of the USDA's latest feedlot data, StoneX's chief commodities economist, Arlan Suderman, provided much needed context on the significant rise in live cattle futures at the Chicago Mercantile Exchange (CME). The report revealed some noteworthy trends in cattle placements, highlighting their wider market implications.
The "Cattle on Feed" report, released last Friday, showed March placements down 12% year-over-year, far below the expected 7% decline. This indicates a significant reduction in future market-ready cattle supplies, particularly notable as the U.S. cattle herd is at its smallest in over 70 years. "This positive USDA report, alongside higher-than-expected slaughter totals last week, pushed cattle futures higher," explains Suderman.
As a case in point, CME June live cattle futures surged well above the 100-day moving average, closing at 178.050 cents per pound. And the May feeder cattle contract rose to 245.175 cents per pound.
Amidst these market shifts, beef prices have begun to stabilize, with the USDA reporting a modest rise in the price of choice cuts of boxed beef, signaling a favorable short-term market outlook.
StoneX continues to monitor these developments closely, providing clients with timely, data-driven analysis necessary to navigate these changes. For further insights and detailed market analysis, visit our website or subscribe to our newsletters.
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