Cattle Markets Navigate Volatile Week: Weaker Futures and Limited Live Cows for Sale Amid Supply Shifts

The livestock futures market experienced considerable pressure this week, with live cattle and feeder cattle contracts sliding amid mixed trading activity. Market participants found themselves navigating a landscape of uncertainty, as physical cattle available for sale remained constrained and traders awaited key supply reports. The overall tone reflected a sector grappling with evolving inventory dynamics and shifting export demand patterns.

Live and Feeder Cattle Futures Face Downward Pressure

Live cattle futures exhibited notable declines, with contracts across most expiration dates losing $1.10 to $1.50 through the week’s session. The momentum, however, showed some complexity as open interest expanded by 820 contracts, suggesting ongoing participation despite the bearish price action. Feeder cattle contracts proved similarly challenged, with most months retreating $0.72 to $1.10, though the expiring January contract managed a modest $1.07 gain. On January 28, the CME Feeder Cattle Index recovered to $366.69, up $2.70, providing a subtle bright spot in an otherwise soft market environment.

Cash Market Tepid: Limited Availability of Quality Cattle for Sale

The spot market for live cattle remained unusually quiet, with cash trading not yet gaining meaningful traction for the week. Bids lingered around the $232 level, reflecting buyer hesitation. The Thursday Fed Cattle Exchange online auction painted a similar picture, with bids ranging from $232 to $233.50 on approximately 1,510 head, yet no transactions materialized. This scarcity of trading activity in physical cattle for sale underscores the broader market uncertainty and suggests producers remain cautious about liquidating livestock at current price levels.

Health Concerns Add to Market Uncertainty

Market sentiment was further clouded by updated disease surveillance data from APHIS. The agency reported four additional new world screwworm cases in Mexico’s Tamaulipas state and one new case in San Luis Potosi, raising the total active cases across those regions to 13. While contained to specific areas, such developments introduce an element of caution into longer-term livestock production planning and supply availability calculations.

Inventory Growth Signals Softer Supply Dynamics

The USDA was scheduled to release its annual Cattle Inventory report later in the week, with market consensus anticipating total cattle and calves holdings down 0.3% from the prior year. However, nuances within the data were expected to prove interesting: beef cows were projected to be up 0.4% year-over-year, while replacement heifers were seen increasing 1.7%, suggesting a shifting composition within the nation’s herd. These shifts carry implications for both short-term supply and the long-term trajectory of productive capacity.

Export Markets Show Strength Despite Domestic Softness

The export arena presented a contrasting narrative. Export Sales data covering the week of January 22 revealed 16,893 metric tons of beef sold, marking the largest volume since November. South Korea emerged as the dominant buyer with 7,600 MT, while Japan claimed 4,900 MT. Actual shipments that week totaled 12,574 MT, with South Korea receiving 3,800 MT and Japan acquiring 3,600 MT. However, longer-term export trends appeared more sobering: November carcass basis beef exports reached just 190.4 million pounds, the lowest level since 2009.

Beef Prices and Slaughter Activity Reflect Market Pressure

Wholesale boxed beef quotations softened through Thursday afternoon’s reporting, with the Choice-Select spread widening to $6.94, suggesting quality differentials remained pronounced. Choice boxes declined $2.08 to $367.66, while Select lost $2.85 to $360.72. On the processing side, USDA estimates for Wednesday’s federally inspected slaughter reached 112,000 head, bringing the weekly cumulative to 436,000 head—a decline of 11,000 head from the previous week and 47,143 head below the corresponding period last year. Reduced slaughter throughput, combined with softer pricing, reflected the market’s struggle with demand pressures and inventory management challenges.

Week’s Contract Settlement Summary

The week concluded with mixed signals across the futures complex. February Live Cattle settled at $235.50, down $1.325, while April declined $1.45 to $237.275, and June eased $1.175 to $233.275. In feeder cattle, January finished at $369.175, up $1.075, though March slipped $0.725 to $365.125 and April retreated $1.075 to $363.225. These settlements reflected the competing pressures of supply management, export opportunity, and domestic demand weakness that characterized the week’s trading.