Sort & Cull

As the market folds back the doors to a new week, there is a lot of uncertainty about what the nearby future holds for the live cattle cash market.

The last two weeks have been stellar for the cash market. Prices increased and the market also saw the highest number of cattle traded on a per week basis thus far for 2022. For the week ending April 24, the market traded 110,597 head -- 71% nearby and 29% deferred. For the week ending April 29, the market saw 135,487 head traded -- the largest volume traded since summer 2020, with 63% being for the nearby market and 37% being for the deferred.

As the calendar begins to work through the first few days of May, it's inevitable that the cash cattle market will make a seasonal turn, as it always does, ahead of the dog days of summer. As calf-fed fats become readily available to packers, packers will begin to pull on those supplies instead of pursuing the cash cattle market. Consequently, this will hinder the cash cattle market's ability to seek higher prices, and showlists will begin to grow. Packers currently sit with a plethora of cattle in their arsenal -- in just the last two weeks, they've added 246,000 head from the cash cattle market alone.

The news of rain and wet forecasts have sent both corn and soybean futures plummeting through trade on May 2, which also came as sweet, sweet news to both the live cattle and feeder cattle contracts. May feeders rounded out Monday's trade $5.07 higher at $161.42, August feeders closed $5.80 higher at $174.07, June live cattle closed $2.55 higher at $135.20 and August live cattle closed $1.77 higher at $137.05. The board's positive movement could help keep some of the live cattle market's morale strong, but with packers having added 246,000 head to supply during the last two weeks, it's unlikely to see cash cattle trading for anything better than steady in the weeks ahead. Nevertheless, the market is juggling a lot of balls in the air as seasonal trends can be shaken when market cycles are in transition and weather-related factors are at play.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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