Live cattle and feeder cattle slip as cash trade stays quiet
Live cattle futures were lower across the nearby and deferred contracts at midday, with declines ranging from $1.00 to $1.70. The move came as there were no deliveries issued against June live cattle futures on Thursday and cash market activity remained subdued, according to CME and market reports. Feeder cattle futures also fell, while the CME Feeder Cattle Index rose to $370.10 on June 10.
In the cash and processing news that supported market-watchers’ attention, JBS said it plans to close its Souderton, Pennsylvania slaughter plant, a facility with nearly 2,000 head/day capacity. Meanwhile, wholesale boxed beef prices were mixed in the Friday morning USDA report, with Choice down and Select up.
Key takeaways
- Price move: Live cattle futures were down $1.025 to $1.700 at midday, while feeder cattle futures fell $1.30 to $1.50.
- Catalyst: Quiet cash trading and a lack of June deliveries on Thursday weighed on nearby futures, while JBS’ planned plant closure added a supply-side headline.
- Another factor: Wholesale boxed beef prices were lower overall in the USDA Friday AM report, with the Chc/Sel spread at $19.13.
- Key implication: With cash bids limited and futures trending lower, traders appear focused on near-term demand and slaughter pace rather than index strength.
What drove the move
Live cattle futures slid as Thursday’s delivery activity offered no support for the nearby contract. There were no deliveries issued against June futures on Thursday, and open interest increased by 2,405 contracts, according to the latest exchange data cited in the report.
Cash trade remained slow this week, with only a small number of bids reported on Friday morning at $254. In addition, the Friday morning Fed Cattle Exchange online auction showed no sales on the 952 head offered, with no bids recorded.
Feeder cattle futures weakened in parallel, with losses of $1.30 to $1.50 at Friday’s midday. Despite the pullback in futures, the CME Feeder Cattle Index rose by $2.04 on June 10 to $370.10.
Market reaction
Wholesale boxed beef prices declined in the Friday AM USDA report. The Choice/Sel spread was reported at $19.13. Choice boxes were down 10 cents to $393.11, while Select was up 73 cents to $373.98.
Slaughter data also fed into the day’s backdrop. USDA estimated federally inspected cattle slaughter on Thursday at 105,000 head. The weekly total was estimated at 421,000 head, down 7,000 from the prior week and 36,768 head below the same week last year.
Futures quotes reported at midday showed the following moves:
- June 26 live cattle: $250.450, down $1.025
- Aug 26 live cattle: $240.975, down $1.700
- Oct 26 live cattle: $233.925, down $1.475
- Aug 26 feeder cattle: $358.175, down $1.475
- Sep 26 feeder cattle: $355.025, down $1.500
- Oct 26 feeder cattle: $351.500, down $1.300
Supply-side headline and what to watch next
One company-specific development pointed to potential longer-term supply adjustments: JBS announced a planned closure of its Souderton, Pennsylvania slaughter plant. The facility’s capacity was described as nearly 2,000 head per day.
For traders and hedgers, the near-term question is whether cash bids firm up as futures remain pressured by thin trade and muted delivery activity. Attention is likely to stay on the pace of slaughter and boxed beef pricing trends in the next USDA updates, along with any new auction activity on the Fed Cattle Exchange.
Next, market participants will watch for fresh cash market price indications, additional USDA data on slaughter and boxed beef, and any further announcements that could affect processing capacity and supply expectations.
