Sort & Cull

It was a long time coming, but thankfully, boxed beef demand has surfaced, and last week the entire cattle complex thrived on the market's seasonal demand.

The live cattle complex thrived both technically and fundamentally as all parties were on board to advance the market amid such positive circumstances. Across the futures complex, the June live cattle contract gained $4.90 throughout the week, and the August live cattle contract gained $4.93 throughout the week. What was especially riveting about the board's performance was that the spot August contract was able to break out of its sideways trading range and turn the market's direction back to higher prices. Friday's closing price of $179.05 was the highest price point the market had traded since late March and was another close above the market's 100-day moving average -- which is always a bullish signal.

The live cattle complex was also complemented by the market's strong performance in the cash cattle market as feedlot managers were disciplined in the marketing of their showlists and were able to trade cattle substantially higher. Throughout the week, Southern live cattle traded mostly at $186, which is $2 higher than the previous week's weighted average, and Northern dressed cattle traded at mostly $300, which is $5 higher than the previous week's weighted average. To put those prices into perspective, the market's all-time highs (scored during the week ending March 22, 2024) are $187 in the South and $302 dressed in the North.

However, the market's recent change in attitude has been because of the uptick in consumer beef demand. Throughout last week's trade, choice cuts averaged $306.74 (up $9.96 from the previous week), and select cuts averaged $293.84 (up $5.79 from the previous week). On Friday (5/17/2024) afternoon, the choice cut closed at $313.45, which is only $0.28 below the year's high made in late March.

The cattle complex has plenty of support backing it currently. There's room and opportunity for the market to continue to trade higher, but it will all depend on beef demand and what consumers do. May your grills be primed and meat on your menu, friends!

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