By Cassie Fish, 

One doesn’t have to look far to find a cattle bull. Friday’s historic and explosive rally in the negotiated fed cattle prices has everyone’s attention. Being in no hurry to sell fed cattle for weeks, adding days on feed—both were richly rewarded as northern prices accelerated by dollars to unprecedented levels. The 5-area average, now the new all-time high, was $192.55, $3.63 higher than the prior week. The south sold only $1 higher and the north as much as up $5. This has bulls predicting packers will soon be throwing wheels under southern cattle and hauling them north.

The packer fed cattle buy totaled 96k head, just under the number traded on the March cash high and 13k head shy of volume traded in June 2023 when cash fed cattle prices made their top. Packers purchased 22k head with time out of the 96k. There are some important differences, mainly that the slaughter pace this year is below last year. Packers last year harvested 512k and 508k head of fats the last two weeks in June while this year 500k head will likely top it. Of course cattle are at a record weights, so beef production last week exceeded 2023 by 1.7 percent with a smaller kill (fewer cows too). YTD beef production is still down 1.6%. Packer margins a year ago were black while this year, it’s a struggle.

Boxed beef prices are likely topping for the season, today printing up $0.75/cwt on choice at $320.64, a new high for the move. But with hot weather hitting the east coast and it being post-Father’s Day, middle meats are expected to soon take a tumble.

CME cattle futures had a dynamic rally on Friday too, and to add drama, open interest increased a massive 8,516 contracts, one of the largest daily increases recorded. It was August that got the lion’s share of OI, up 5,179 contracts. This action surely speaks to a big managed fund buy but that won’t be confirmed for days. Soon-to-expire June took out its March high while most active August fell short. Today, August has posted a hook down seemingly content to fence sit. Is a top in the making or is the market merely taking a rest day? Afterall, August LC rallied 685 points from Thursday’s low to today’s high, so a pause seems logical.

The real answer lies back with the cash fed cattle market. Reports are that more market-ready fed cattle will be coming on in July in the north. Usually when the packer chases as hard as they did last week, a top is near. This week’s show list numbers surged in Texas and Nebraska, as cattle were flushed out by sharply higher money. More questions than answers for now.


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