Sort & Cull

Although last week was utterly brutal, both the live cattle and feeder cattle contracts inched higher through Monday's trade. Now, in all fairness, the market didn't seem necessarily comfortable in its higher trend, but the contracts ended the day green, nevertheless.

But where the cattle complex sits today -- a sideways, steady chop is more realistic, with down pressure always looming. The problem with where the market sits today, and when looking at the immediate future, is that traders and market participants alike have the same question in mind: where is the additional support going to come from to help the market trade higher again?

It's highly unlikely that anytime soon the fed cash cattle market will trade higher, as packers have strategically secured enough inventory in recent weeks to build up supply around them. Last week, Southern live cattle traded mostly at $222, which was $3.00 lower than the previous week's weighted average and Northern dressed cattle traded at $345, which was $10.00 lower than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 79,292 head, of which 74% (58,409 head) were committed to the market's nearby delivery, while the remaining 26% (20,883 head) were committed to the market's deferred delivery option.

And although domestic feeder cattle supplies remain thin, the market's recent decline over the last two months has buyers more selective about the calves they're procuring and wondering if a better buying opportunity lies ahead of them if the market continues to decline.

So where's the silver lining of hope, you ask? And I'd point you to no other chart than the continuous feeder cattle chart. I know that seeing feeder cattle prices lose $0.50 per pound in the last two months is gut-wrenching. But even with the market's recent decline, if you were to sell your feeder cattle today, it's likely that the price you'd receive would be the second-highest all-time price you've ever received. Second only to marketing your calves in October 2025, or early in the spring of 2026. So while it never feels good to make marketing decisions in an unstable market, do keep in mind the historical perspective of price, and that may lend you some comfort.

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

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