Sort & Cull

What fun would it have been for the cattle complex to simply trade higher throughout Monday's duration following last week's exceptional performance? But no, no, no. You see, the cattle complex and its fickle nature couldn't simply let you and I have an easy start to the week; so instead, here we are again, sorting through the details.

Last week, the cattle complex traded successfully. Throughout last week's trade, April live cattle gained $8.98, June live cattle gained $8.88, May feeder cattle gained $11.55, and August feeder cattle gained $10.95. The cash cattle market was expected to trade steady at best but then, low and behold, prices jolted higher and truthfully took most people by surprise. Northern dressed cattle traded at mostly $332 to $335, which is $4 to $7 higher than the previous week's weighted average. Southern live cattle traded at mostly $208 to $210, which is $4 to $6 higher than the previous week's weighted average. And in terms of the feeder cattle complex, I don't think there's any better point to highlight than the CME Feeder Cattle Index, which reached a new all-time high of $293.57 on Thursday afternoon, April 17, showcasing just how strong buyer demand really is.

But of course, Monday's market wasn't given a free pass to simply trade higher and continue to ride the shirttails of the previous week's success. Instead, traders fixed their attention to the likelihood of continued market stress amid trade chatter -- and traders weren't pleased with the equity markets' lower tone either. Which leaves the market with an unsettled question of: Will a post-Easter boxed beef rally be enough to offset other concerns, especially those of trade turmoil?

And while the market is subject to trade any which way it wants, I personally believe packers wouldn't have advanced the fed cash cattle market last week if they didn't believe demand was going to seasonally increase. Historically speaking, from now through the Memorial Day weekend, boxed beef demand normally peaks for the year. The only factor working against that seasonal trend is there will be extra beef available if trade details don't get worked out soon with China. Otherwise, to most people's disbelief, consumers continue to demand beef -- even with the expensive price tag. Unfortunately, though it's encouraging to see consumers buying beef week in and week out, and it's likely the market is going to need to see more than just strong beef demand to curb the fears of trade disruptions.

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

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