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May Feeder Cattle gap opened lower and broke down to an early low before retracing and closing the opening gap. It made the high at 286.05, which is just above critical short-term moving averages at the 8-DMA and 13-DMAs, now at 285.525 and 285.90 respectively and below resistance at 286.55. The market turned lower and crashed, making the low at 282.275 and settling near the low at 283.125. The breakdown took price below support at the rising 21-DMA now at 283.425 and key support at 282.35. It settled in between the two levels. The cash fundamentals remain solid as the Feeder Cash Index continues to make all-time highs, with the latest print at 291.93. But, outside market weakness pressured livestock and the result was an ugly session as traders liquidated longs, in my opinion to salvage trading accounts savaged by the crash in most markets over the trade tariff negative news.  We’ll see!... A breakdown from the 282.35 could see price test support at 279.825 – 279.20 support band. Support then comes in at 277.25. If price can trade above the rising 21-DMA, we could re-test resistance at the 8-DMA and 13-DMAs. Resistance then comes in at 286.55. The short-term moving averages have turned negative with the 8-DMA crossing below the 13-DMA. We need a rapid reversal in fortune or the we could see continued weakness in Feeders, in my opinion.

The Feeder Cattle Index increased and is at 291.93 as of 04/02/2025. 

June Live Cattle gap opened lower and traded to the low at 203.75. The weak open dipped below support at the rising 13-DMA now at 204.00 and stopped just shy of the 203.50 support level. This support area stunted the selloff and price reversed course and surged to the session high at 206.30, closing the opening gap. The surge took price past the key level at 205.55 but the strength couldn’t be sustained and price pulled back towards the low and settled in the lower end of the trading range at 204.70. Settlement was just under the rising 8-DMA now at 204.75. The tariff news, in my opinion, wasn’t all that bad for the cattle market as Mexico and Canada weren’t penalized as the livestock markets are part of the USMC Trade pact and markets compliant with the agreement weren’t assessed additional tariffs. This will help the import market and keep cattle flowing into the US , in my opinion. This was a negative for the market though as Wednesday’s rally to a tie for the all-time high price at 207.725 was likely in response to expectations that tariffs imposed would tighten cattle supply further, causing price to lift to the all-time high. The high formed a Tweezer Top formation which is a negative for the market in my opinion. This also likely played a small role in the early sentiment. The negative tariff news for cattle was for Australia. They were slapped with a 10% tariff on their beef and they said they will pass that extra cost on to consumers. Some traders view that as a positive because the worry was for a tariff of 25% for Australia. The big blow for the cattle market in my opinion, was the crash in the Equity markets as a result of the fear that tariffs overall would put the US in a recession and consumers would shy away from eating beef. China also has been hit with tariffs and what measures they take in response to the news also has traders on edge. With the cattle markets at the high end of the price spectrum traders likely had to liquidate positions to help offset losses from the outside markets. It is a tough situation as the uncertainty over our trading partners’ response to our tariff implementation could lead to an all-out trade war. The cash market all but ignored the futures crash as trades took place on Thursday and we could call this a victory for producers as cash prices were basically steady with last week’s cash prices. Positive cash fundamentals trumped the outside markets weakness and the packer remains captive to the producer in my opinion. We’ll see!... If price trades below the low, it could test support at 203.50. A breakdown below here could see support tested at the rising 21-DMA now at 202.675. A rally past the 8-DMA could see price re-test resistance at 205.55. Resistance then comes in at the all-time high at 207.725 for the lead contract. 

Boxed beef cutouts were lower as choice cutouts decreased 1.53 to 338.37 and select decreased 0.99 to 317.84. The choice/ select spread narrowed and is at 20.53 and the load count was 131.

Thursday’s estimated slaughter is 121,000, which is above last week’s 119,000 and below last year’s 121,955. The estimated slaughter for the week (so far) is 472,000, which is below last week’s 485,000 and last year’s 474,460.

The USDA report LM_Ct131 states:  So far for Thursday in the Southern Plains, negotiated cash trading has been mostly inactive on light demand. Last week in the Southern Plains, live FOB purchases traded from 209.00-210.00. In Nebraska and Western Cornbelt, negotiated cash trading has been limited on light demand. In Nebraska, a few dressed delivered purchases traded from 335.00-345.00. In the Western Cornbelt, a few live FOB purchases traded at 213.00. However, not enough purchases in either region for a market trend. For the prior week in Nebraska and Western Cornbelt, live FOB and dressed delivered purchases traded at 213.00 and from 335.00-345.00, respectively.

The USDA is indicating cash trades for live cattle from 208.00 – 213.00 and from 330.00 - 345.00 on a dressed basis (so far).

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

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