Cattle Futures Mixed On Lower Feedlot Placements

Key Moments

Futures Market Overview

Live cattle futures recovered from early weakness on Friday, with contracts settling in a mixed range from $0.30 lower to $1.15 higher on the day. The October contract finished the week $0.95 above its prior Friday close. Exchange data showed open interest declining by 1,841 contracts.

Cash cattle trading advanced with limited volume, with sales reported at $355-360 dressed and $223-227 in the live market.

Feeder cattle futures also posted a mixed close. The front-month August feeder cattle contract slipped $0.55, while other contracts ended between $0.10 and $1.85 higher. September feeders dropped $5.52 over the course of last week. The CME Feeder Cattle Index declined another $0.85 on August 20 to $341.00.

Policy Development on Beef Imports

On Friday, President Trump stated the US “will allow up to 300,000 metric tons of product for ground beef to be imported with no out of quota tariffs” for a 90-day period.

USDA Cattle on Feed: Placements Fall Sharply

USDA’s latest Cattle on Feed report indicated a notable contraction in feedlot placements. July placements fell 11.01% from the prior year to 1.422 million head, coming in well below market expectations.

July marketings totaled 1.62 million head, down 7.38% from a year earlier and broadly consistent with pre-report estimates. As of August 1, cattle on feed inventory stood at 11.117 million head, up 1.79% year-on-year but below projections that had anticipated a 2.4% increase.

Positioning: Commitment of Traders

Commitment of Traders data showed managed money participants moderating their bullish exposure in cattle. In live cattle futures and options, money managers reduced their net long position by 3,148 contracts to 61,514 contracts as of Tuesday.

In feeder cattle futures and options, speculative traders cut 1,240 contracts from a net long of 7,498 contracts during the week of August 18.

Wholesale Beef Prices and Slaughter Data

Wholesale boxed beef values weakened in the Friday afternoon USDA report, with the Choice-Select spread narrowing to $24.37. Choice boxed beef declined $4.24 to $385.69, while Select boxes fell $2.42 to $361.32.

USDA estimated federally inspected cattle slaughter for last week at 523,000 head, an increase of 6,000 head compared to the previous week and 32,676 head below the same week a year earlier.

Friday Futures Settlement Prices