The live (LEQ25) and feeder cattle (GFQ25) futures markets experienced some profit-taking from speculators last week, leading to technically bearish weekly low closes on Friday. This indicates potential follow-through selling pressure early in the week. Both live and feeder cattle futures markets are showing signs of slight deterioration in their near-term technical postures. Additionally, the cash cattle (GFY00) (LEY00) and fresh beef markets are displaying mild weaknesses as well.
As of midday Friday, the cash cattle trade was relatively light, with steers averaging $238.00 and heifers averaging $237.00. This marks a potential end to the eighth straight week of record high average cash cattle prices, with the USDA set to report the final cash cattle average trading price near midday Monday. The fresh beef market is also seeing prices decline, with wholesale beef prices mixed and Select-grade reaching a new high.
The monthly USDA cattle-on-feed report released last Friday showed a 1% decrease in U.S. cattle on feed, in line with trader expectations. Cattle and calves on feed for the slaughter market in feedlots with a capacity of 1,000 or more head totaled 11.4 million on June 1, 2025, down 1% from the previous year. Placements in feedlots during May were 8% lower than in 2024, with marketings of fed cattle also lower than expected.
Cattle producers and traders are closely monitoring the scorching heat in the U.S. Plains states, with temperatures near 100 degrees causing livestock stress that may impact weight gain. Risk appetite in the general marketplace will likely influence cattle futures trading in the near term, especially with escalating tensions in the Israel-Iran war potentially affecting consumer demand for beef.
Despite the challenges, cattle bulls have shown resilience this year, buoyed by historically low cattle numbers on feed and strong consumer demand for beef during peak grilling season. The discounts that live cattle futures hold to the cash cattle market suggest limited downside in the near term, but the significant discount in October live cattle futures to the cash cattle market indicates expectations of lower cash prices in the coming months.
In conclusion, while there are some challenges in the cattle markets, there are also opportunities for growth and resilience. It is important for traders and producers to stay informed and adapt to changing market conditions to maximize profitability.
