June stay cattle (LEM26) futures on Friday rose $1.725 to $245.225 however for the week had been down $2.475. Might feeder cattle (GFK26) futures Friday gained $2.025 to $360.90 and for the week had been down $4.375.
The stay cattle and feeder cattle futures markets Friday noticed corrective bounces, however the bears had the higher week. The near-term technical postures for each markets have deteriorated additional.
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Cattle are being faraway from wheat fields sooner than normal, pushing April placements larger, though Might might present a decline from final yr. Climate stays a key driver – till drier areas obtain impactful moisture, the demand for alternative cattle will seemingly stay subdued.
The USDA at noon on Friday reported energetic money cattle commerce, with steers averaging $246.00 and heifers $246.01. The company earlier final week reported money buying and selling the week prior averaged $248.02.
Regardless of the current dip in money cattle costs, tight fed cattle provides on feedlots will proceed to favor feedlot operators within the coming weeks, particularly with the outside grilling season on the doorstep. In the meantime, packer margins have eased a bit however stay deep within the purple regardless of firming boxed beef costs not too long ago. That can proceed to considerably diminish cattle slaughter ranges, which stay beneath these of 1 yr in the past.
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A worrisome ingredient for cattle market bulls and for cattle producers is retail gasoline costs which are across the $4.00 stage per gallon. If gasoline costs tick a lot above that stage, shopper confidence can be dented and that might translate into diminished demand for higher-priced beef cuts on the meat counter. Nevertheless, with U.S. inventory indexes at or close to report highs, such signifies shopper confidence within the coming months might stay strong.
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USDA Annual Cattle Slaughter Abstract
The USDA final week launched its annual cattle slaughter abstract report, offering finalized knowledge for U.S. meat manufacturing in 2025. Along with the common month-to-month studies, the annual gives perception on the place meat manufacturing is concentrated in addition to the variety of vegetation working as of Jan. 1, 2026.
Crimson meat manufacturing was down 2% from 2024 to 53.8 billion kilos. Beef manufacturing got here in at 26.1 billion kilos, down 4% from 2024, whereas pork manufacturing was up 1% to 27.6 billion kilos. The numbers had been little modified from the preliminary finish of yr estimates launched in late January that confirmed 53.74 billion kilos of purple meat manufacturing for 2025.
The report stated 49.4% of economic U.S. purple meat manufacturing was targeted in 4 states: Iowa (16.6%), Nebraska (14.4%), Kansas (10.4%), and Texas (8.0%). The overall variety of federally inspected vegetation elevated from 1,089 on Jan. 1, 2025, to 1,127 on Jan. 1, 2026. There was a slight lower in non-federally inspected vegetation from 1,827 to 1,796. In complete, the variety of vegetation elevated by 7 to 2,923 within the U.S. Notably, Texas led states with probably the most new vegetation beneath federal inspections, up 9, to78.
Lean Hog Futures Bulls Work to Stabilize Costs
June lean hog (HEM26) futures on Friday fell $1.55 to $101.90 however for the week had been up 85 cents. The futures market noticed technical promoting stress to finish the buying and selling week as costs stay trapped in a downtrend on the every day bar chart.
The most recent CME lean hog index is up 38 cents to $91.43. Monday’s projected money index worth is up a penny to $91.44.
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Each money hog and wholesale pork fundamentals have improved of late. Home demand stays comparatively flat, though grocers ought to start ramping up purchases for Memorial Day options and to fulfill summer time grilling demand earlier than slaughter and provides wane seasonally. Nevertheless, a doubtlessly price-bearish ingredient is that each common hog and carcass weights have risen in current weeks.
Export demand for U.S. pork wants to select up for money hog, recent pork, and futures costs to trek to larger floor within the coming weeks and months. Enhancing relations between the U.S. and China would seemingly imply higher demand for U.S. pork from China. Nevertheless, current studies from China point out that the nation is presently coping with a glut of pork provides.
Lengthy-Time period Implications of DOJ Meat Packer Investigation Might Be Large
Cattle merchants and feedlot operators can be retaining a detailed eye on developments and longer-term implications concerning the U.S. Division of Justice’s investigation into collusion within the meat-packing trade.
The DOJ investigation into the nation’s largest meatpacking corporations for collusion and worth fixing has the potential to reshape the cattle and beef industries, long run. Nevertheless, previous efforts to interrupt the businesses’ maintain have gone nowhere. The White Home known as for an examination into the meatpacking corporations’ practices after President Donald Trump, in a put up on social media, accused packers of artificially inflating costs and jeopardizing the nation’s meals provide. A White Home information launch particularly named JBS (JBS), Cargill, Tyson Meals (TSN) and Nationwide Beef as targets of the investigation. The businesses collectively slaughter 85% of the nation’s cattle and a majority of its hogs.
Inform me what you assume. I take pleasure in listening to from my valued Barchart readers from throughout the globe. E mail me at jim@jimwyckoff.com
On the date of publication, Jim Wyckoff didn’t have (both straight or not directly) positions in any of the securities talked about on this article. All info and knowledge on this article is solely for informational functions. This text was initially printed on Barchart.com
