Live Cattle Futures Stage Tuesday Rally, Setting Up Strong Week Ahead

The cattle futures market opened the week on an upbeat note Tuesday, with live cattle contracts posting solid gains across all front-month contracts. The Feb delivery climbed 22.5 cents to close at $232.375, while April advanced 60 cents to settle at $234.575. The Jun contract made the biggest move, up 100 cents and finishing at $230.60. This collective strength pointed to renewed buying interest as traders positioned ahead of key economic data later in the week.

Open interest dynamics told an interesting story beneath the surface. While Feb contracts saw some liquidation, with open positions declining 2,993 contracts, the overall market added 1,604 contracts of new positioning. The cash cattle trade remained relatively quiet, with only a handful of transactions recorded at the $232 level so far this week, reflecting the typical thin volume that characterizes early-week trading in agricultural futures.

Feeder Cattle Follow with Stronger Performance

The feeder cattle complex outpaced live cattle on a percentage basis, with Jan, Mar, and Apr contracts each posting triple-digit cent gains. Jan feeders rallied 70 cents to $362.625, Mar advanced 122.5 cents to $357.675, while Apr climbed 155 cents to reach $356.45. Open interest expanded by 455 contracts, suggesting that larger commercial positions were accumulating longs in anticipation of tighter supplies ahead.

The CME Feeder Cattle Index declined $1.26 to $367.68 on January 19, providing a baseline for physical cattle values. The Oklahoma City feeder cattle auction drew 9,551 head to sale, with prices described as steady to $4 lower on most offerings. The modest downward pressure at the cash level stood in stark contrast to the strength displayed in the futures pits, highlighting the disconnect between immediate cash values and forward-curve expectations.

Wholesale Beef Market Climbs on Reduced Slaughter

Wholesale boxed beef prices trended higher in Tuesday afternoon’s USDA report, signaling improved demand for packaged product. Choice cuts gained 43 cents to $364.76 per hundredweight, while Select boxes fell 49 cents to $359.84. The Choice/Select spread widened to $4.92, reflecting stronger demand for higher-quality retail cuts compared to food service selections.

The fundamental backdrop supporting prices came into sharper focus with Tuesday’s slaughter estimates. Federally inspected cattle processing totaled 114,000 head on the day, bringing the weekly total to 219,000 head. This figure represented 16,000 head below the previous week and 15,837 head below the same week last year. The year-over-year deficit suggests tighter cattle supplies working through the system, which typically provides support for both live cattle and feeder cattle values moving forward as the week progresses.