Strong Friday Rally for Cattle Futures

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Live cattle limited the week’s draw down with a triple digit gain of as much as 2% on Friday. Feb fats were up by $3.20 for the day, but still down by $3.40 for the week. There have been no Dec cattle deliveries issued yet, the Friday board rally now has Dec at a ~$1-6 discount to the cash. There were a few $166-$168 sales reported on Friday, but USDA maintained the bulk of sales for the week was near $171. Feeder cattle futures closed up by 2.3% on Friday, flipping the board to a net gain for the weekly move. Jan feeders closed 87 cents above last Friday. The CME Feeder Cattle Index for 12/06 was back down by $1.92 to $222.31. 

CFTC’s weekly Commitment of Traders report had cattle spec traders taking closing longs for an 8.7k weaker net long of 27.7k contracts on 12/5. The spec traders had extended their net short in feeder cattle by 634 contracts to 1,247 via net new selling.

The WAOB left the 2023 beef output at 26.932 billion lbs, in today’s WASDE report, but raised 2024 production to 25.99 billion lbs. That came via a 60m lb increase to Q1, a +45m for Q2, and a +75m for Q3. 

Friday afternoon’s boxed beef report showed Choice boxes were $288.01, down by $1.83, and Select boxes were $257.90, down by 93 cents cwt. The weekly recap from USDA had beef production at 532.5 million lbs for the week, a 0.5% increase wk/wk but a 1.8% drop yr/yr. Cattle slaughter totaled 635k head, which matches last week but is 2% below the same week last year. YTD production and slaughter were reported at 25.034b lbs (-5.2%) and 30.459m hd (-4.7%) respectively. 

Dec 23 Cattle  closed at $165.450, up $3.100,

Feb 24 Cattle  closed at $165.725, up $3.200,

Apr 24 Cattle  closed at $169.300, up $3.350,

Jan 24 Feeder Cattle  closed at $215.300, up $5.025

Mar 24 Feeder Cattle  closed at $216.075, up $4.900

On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.