What Cattle-on-Feed Report, EU Tariffs Mean for Live and Feeder Cattle Futures
The United States Department of Agriculture released its monthly cattle-on-feed report for May on Friday.
The report showed U.S. cattle and calves on feed for the slaughter market for feedlots with capacity of 1,000 or more head totaled 11.4 million head on May 1. The inventory was 2% below May 1, 2024. Cattle placed in feedlots during April totaled 1.61 million head, down 3% from the same time last year. Net placements were 1.56 million head.
During April, placements of cattle and calves weighing less than 600 pounds were 310,000 head, 600-699 pounds were 225,000 head, 700-799 pounds were 370,000 head, 800-899 pounds were 443,000 head, 900-999 pounds were 195,000 head, and 1,000 pounds and greater were 70,000 head. Marketings of fed cattle during April totaled 1.83 million head, 3% below the same time in 2024. Other disappearance totaled 50,000 head during April, 11% below 2024.
While the cattle-on-feed report is deemed neutral for price action in cattle futures, the data still favors the bullish camp due to lower placements and lower marketings than last year.
Meanwhile, USDA's monthly cold storage report was also released on Friday afternoon. The agency reported U.S. beef stocks totaled 418.1 million pounds, down 7 million from March, which was less than the five-year average decline of 16.5 million pounds during the month. U.S. beef inventories declined 8.2 million pounds (1.9%) from the same time last year and 52.1 million pounds (11.1%) from the five-year average.
Cattle Futures Bulls Continue to Show Resilience
Trading action in live cattle (LEM25) and feeder cattle (GFQ25) futures last Friday was impressive for the bulls despite the modest price gains. This is because of the keener risk aversion in the general marketplace Friday following social media posts from President Donald Trump that sunk the U.S. stock market.
The near-term technical chart postures for the live and feeder cattle futures markets continue to be overall price-bullish. There are no early, strong technical clues that market tops in live and feeder cattle futures are close.
Cash Cattle and Beef Market Fundamentals Remain Solid
USDA last Friday at midday reported cash cattle trading up to that point in the week was around $229.50 a hundredweight for steers and heifers. The week prior's average cash cattle trading averaged a record-high $226.45, according to USDA. So, it looks like last week's average cash cattle trading price will set yet another record high and keep alive a string of record-high weekly average cash prices.
The noon beef report Friday showed wholesale boxed beef values continued to work higher. Choice cutout was up another $0.82 to $361.79, while Select rose $2.10 to $351.05. Choice and Select grade beef prices remaining at historically elevated levels suggests still-strong consumer and retailer demand for beef.
The Memorial Day weekend kicked off the unofficial start of summer and the outdoor grilling season. That suggests continued strong consumer and retailer demand for beef in the coming weeks. However, it's likely that risk appetite in the general marketplace and consumer confidence will have to remain upbeat for cattle and beef prices to remain at their historically elevated levels.
Trump late last week recommended a straight 50% tariff on goods from the European Union starting on June 1, and that's what dented risk appetite Friday. He has since delayed those tariffs until July 9.
Important for cattle market bulls, the U.S.-global trade situation cannot deteriorate further. If the situation worsens, it's likely the cattle and beef markets have seen their prices peak. The EU is a big purchaser of U.S. agricultural goods and trade talks at present appear to be tense.
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