Call the Market

The cattle complex has been committed to rallying and supporting its strong fundamental position for well over the past year. But as the market nears the long, three-day weekend for the Memorial Day holiday, some sluggishness has crept into the complex.

Bull-spreaders continue to point to the limited supply of cattle and will fairly argue, until domestic supplies are built up, these prices are sustainable. On the other hand, those who take a mostly bearish position are fixated on the unusual fact that boxed beef demand has been slow to rally during its normal seasonal peak in May/June; that packers have been able to recently secure more inventory; and that the board is seemingly played out for the near-term.

Let's discuss the bearish points in fuller detail.

First, in years past, May and June have historically been when boxed beef prices make their annual high. As temperatures warm and spring/summer festivities launch into action, Americans have been known to spend more money on beef as they gladly look forward to the year's prime-grilling season. But this past year hasn't followed the historical norm. Up until this last week, prices have been lethargic, and many have questioned if beef prices are simply too high for most Americans to afford in today's economy. For perspective, on Tuesday afternoon (5/20/2025) choice cuts closed at $358.75, but a year ago (in 2024) choice cuts were trading at $312.70 and two years ago (in 2023) choice cuts were trading at $301.10. While cow-calf producers and feedlot managers want beef demand to be strong and robust, it's a terrifying reality to ponder if beef prices are simply becoming too high. It's never good for an industry to have its consumers turn away from its product because it's simply too expensive.

Second, over the last three weeks packers have been able to slowly build up supply in the fed cash cattle market through deferred delivery options. Combine the fact that packers have already been running slower processing speeds with the fact that this upcoming week will be an even slower kill schedule with the three-day weekend, and it's obvious packers won't need as many cattle next week, which likely means fed cash cattle prices will trade steady at best this week. And with fed cash cattle prices having rallied for five-straight consecutive weeks, the market may be due for a pause in its rally. Since the week ended April 11, the fed cash cattle market has been able to add $28 to dressed prices and $17 to live prices in just five weeks.

Last, but not least, the futures complex seems to be at a stalemate after the dramatic trade endured last week when prices rallied sharply and then fell -- all within a week's time. Since then, the spot August contract has traded sideways, not seeming to possess the support necessary to really advance. And with next week a holiday-shortened week, it wouldn't be surprising to see traders let the market chop sideways until after the long, three-day weekend.

I share these points not to overlook the strong bullish position of the marketplace, but to explain some of the immediate struggles the market is facing. Holiday-shortened weeks always throw a kink into the market's normal trading rhythm, but with some technical and fundamental pushback at hand, the market will likely remain hesitant and skeptical of trading much higher until after the Memorial Day weekend.

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

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