Livestock Market Under Pressure: Understanding Recent Cattle Price Movements

The cattle market faced significant headwinds on Friday, reflecting broader adjustments across multiple contract months. For those asking how much are cows worth in today’s market, the answer depends on contract timing and market conditions, with prices showing considerable variance across the futures curve. Live cattle futures demonstrated weakness across most contracts, declining approximately 47 cents to reach $1.75 levels, though February proved to be a notable exception to this broader decline.

Live Cattle Futures Slip While February Defies the Trend

Live cattle prices experienced pressure throughout the session, with most contract months moving lower. However, February live cattle contracts bucked the downward trend, posting a gain of 35 cents as cash market strength provided underlying support. This performance marked a substantial weekly advance of 95 cents for the February contract, suggesting that nearby delivery months benefited from fundamental support.

The cash market for live cattle settled within the range of $238-240 per hundredweight across the nation, while dressed beef traded in the $375-378 range. The Fed Cattle Exchange online auction on Friday morning recorded sales at $240-241 per hundredweight on 719 head of live cattle, with dressed offerings at $375 on 36 head. Out of the 1,510 head listed for auction, these sales volumes represented moderate activity in the cash channel.

Feeder Cattle Show Weakness Amid Market Adjustment

Feeder cattle futures experienced steeper declines than their live cattle counterparts, with nearby contracts falling $4.85 to the $5 level. Despite this weakness, March feeder cattle maintained positive ground with a dime gain for the week. The CME Feeder Cattle Index recovered somewhat, climbing $4.00 to close at $370.69 as of January 29, providing modest relief after earlier pressure.

Cash Market Strength Provides Support for Near Contracts

The underlying strength in the cash market played a crucial role in supporting nearby futures contracts, particularly evident in February live cattle performance. This relationship between spot prices and futures reflects typical market dynamics where physical supply conditions influence near-term contract valuations. The premium of cash prices relative to deferred contracts encouraged buying interest in front-month delivery months.

Disease Update Impacts Market Sentiment

Thursday afternoon brought an update from APHIS regarding screwworm cases in Mexico, reporting 4 new cases in Tamaulipas and 1 additional case in San Luis Potosi. This brought the total active cases in those Mexican states to 13, maintaining focus on disease management issues affecting the broader North American livestock complex.

USDA Cattle Inventory Data Reflects Year-Over-Year Declines

The annual Cattle Inventory report from USDA revealed notable year-over-year adjustments in the U.S. herd. Total cattle and calves decreased 0.37% from the previous year, settling at 86.155 million head. The beef cow inventory was tallied at 27.607 million head, representing a 1.02% decline, while replacement heifers showed growth of 0.89% year-over-year, reaching 4.714 million head. These shifts in herd composition carry implications for future beef supply dynamics.

Trading Activity and Managed Money Positioning

Commitment of Traders data through January 27 indicated active participation by managed money participants. Managed money accounts added 4,208 contracts to their net long position in live cattle futures and options, bringing their cumulative net long position to 105,685 contracts. In feeder cattle futures and options, speculative traders added 546 contracts to their net long position, bringing that total to 16,629 contracts by January 27.

Beef Pricing Shows Mixed Signals in Weekly Report

Wholesale boxed beef prices presented a mixed picture in Friday’s afternoon report. The Choice-Select spread narrowed to $3.62, reflecting differential demand patterns. Choice boxed beef declined $2.10 to $365.56 per hundredweight, while Select beef posted a gain of $1.22, settling at $361.94. This divergence in pricing between the two grades suggests varied buyer preferences in the wholesale channel.

Slaughter Activity Moderates Below Year-Ago Pace

USDA federally inspected cattle slaughter for the week totaled an estimated 531,000 head, representing a decline of 4,000 head compared to the previous week and running 70,785 head below the comparable week from the prior year. This reduced slaughter pace reflects seasonal patterns and inventory management decisions within the beef complex.

The cattle market continues to navigate multiple factors influencing prices—from disease concerns in Mexico to inventory adjustments and cash market conditions—making it essential for market participants to understand the various forces determining cattle values and overall livestock costs in the current environment.