Cattle Market Navigates Forth and Back Amid Week of Weakness as Mountain of Challenges Loom

The livestock complex faced mounting headwinds during the recent trading week, with cattle futures moving forth and back as traders weighed a mountain of bearish pressures. Live cattle contracts retreated substantially while feeder cattle showed more resilience, creating a complex market backdrop ahead of key inventory data release.

Live Cattle Futures Retreat Across the Board

Live cattle futures declined sharply, with losses ranging from $1.10 to $1.50 across most contract months. The Feb contract closed at $235.50, down $1.325, while Apr futures fell to $237.275, off $1.45. June contracts also surrendered ground, finishing at $233.275, down $1.175 per cwt. Open interest climbed 820 contracts, suggesting traders were adjusting positions ahead of important economic data. Cash market pricing remained subdued, with live cattle bidding stalled at $232, while the Fed Cattle Exchange online auction posted bids ranging from $232 to $233.50 on roughly 1,510 head with no transactions completed—a sign of buyer hesitation in the spot market.

Feeder Cattle Show Mixed Signals Amid Index Adjustments

The feeder cattle complex presented a more nuanced picture. Feeder futures broadly declined 72 cents to $1.10, though the expiring January contract bucked the trend with a gain of $1.07. The CME Feeder Cattle Index surged $2.70 to $366.69 in late January, indicating some underlying strength in the feeder market despite the weakness in front-month futures. March feeders fell $0.725 to $365.125, while April contracts dropped $1.075 to $363.225, suggesting traders remain cautious about near-term price direction.

Health and Regulatory Pressures Mount

A growing mountain of health concerns continues to weigh on market sentiment. APHIS (Animal and Plant Health Inspection Service) reported four new screwworm cases in Tamaulipas, Mexico, along with one additional case in San Luis Potosi during late January, bringing total active infections in those Mexican states to 13. The ongoing screwworm situation presents an additional layer of uncertainty for traders evaluating medium-term market fundamentals and potential trade implications.

Export Momentum Builds Despite Global Headwinds

Export data provides a glimmer of optimism moving forth through the market. U.S. beef export sales reached 16,893 metric tons during the week of January 22—the largest weekly sales volume since November, signaling renewed international demand. South Korea emerged as the leading buyer with 7,600 MT purchased, while Japan accounted for 4,900 MT. Actual beef shipments totaled 12,574 MT that week, with South Korea receiving 3,800 MT and Japan taking 3,600 MT. However, November carcass-basis beef exports painted a grimmer picture at 190.4 million pounds—the lowest volume recorded since 2009. Conversely, beef imports declined 1.2% year-over-year to 151,316 MT, providing some domestic market relief.

Domestic Slaughter and Wholesale Pressures Persist

Wednesday’s federally inspected cattle slaughter reached 112,000 head, with the weekly total at 436,000 head. This represented an 11,000-head decline from the previous week and fell 47,143 head short of the comparable week last year, reflecting slower pace of processing. Wholesale boxed beef prices retreated further, with Choice boxes declining $2.08 to $367.66 and Select dropping $2.85 to $360.72. The Choice-Select spread widened to $6.94, suggesting divergent strength between premium and commodity beef cuts as buyers navigate current supply realities.

Looking Ahead: The Path Forward

Traders face a mountain of uncertainty as the week progresses, with the USDA’s annual Cattle Inventory report set for release. Market expectations call for total cattle and calves down 0.3% year-over-year, while beef cow inventories are projected up 0.4% and replacement heifer counts anticipated to climb 1.7% compared to last year. These figures will be critical in determining whether the market can move forth with confidence or whether additional pressure awaits. The confluence of health concerns, mixed export signals, and domestic slaughter weakness creates a complex environment where prices will likely continue oscillating forth and back until clearer fundamental direction emerges.