Cattle futures were higher early Tuesday, May 26, despite a bearish United States Department of Agriculture Cattle on Feed report released before the holiday and lower weekly closes. Joe Kooima with Kooima Kooima Varilek said the market had already anticipated negative data, noting, “You take a look at the big dive that we had, especially Thursday, Friday, late in the week last week. You needed to see an on-feed report that was drastically bearish. And we got a bearish report, but I don’t know if it’s as drastic as what the market bought into last week.”
The latest figures showed cattle on feed numbers up 1.8% from a year ago at 11.584 million head and placements up 5.5%, above average trade guesses; marketings were down 10%. Kooima attributed higher placements to tighter numbers last year due to partial border closures for Mexican feeders and weather events like drought and wildfires forcing some feeders off pastures early. He also pointed out that producers are feeding cattle to heavier weights: “We’re definitely seeing a lot of that… you’re talking extra 40, 50, 60 days in some cases just to get that choice select spread is the way it is.”
Both live and feeder cattle futures posted lower weekly closes last week as funds liquidated positions amid technical chart damage. Looking ahead, Kooima questioned whether funds would return: “We’ll see how today kind of closes. I’m not in the camp that it’s enough for it necessarily.” He referenced other factors weighing on sentiment, such as legislative comments about beef pricing and ongoing labor issues at major packing plants including Cargill’s Fort Morgan facility.
In cash markets last week, trade was mostly $260 with dressed prices between $410-$412—levels described as record highs but possibly signaling a cash top for now. Additional uncertainty stemmed from labor developments: “When you start having those headlines about a major packing plant like that has a lot of numbers per day… If you start taking them away then yeah we probably have enough numbers here for a little while,” Kooima said.
Lean hog futures continued trending downward Tuesday after posting lower weekly closes previously; smaller kills and empty barns were noted across regions but slow domestic demand persisted even with pork cutouts barely above $100 compared to record beef prices.
Grain markets traded mostly lower alongside crude oil following reports of possible ceasefire negotiations with Iran, which could open shipping lanes temporarily—a development being watched by fund traders who may reduce length if peace talks progress further unless offset by weather threats or increased buying from China.
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