June cattle finished higher on the day yesterday and closed at its highest level since March 6th. The short supply in the near-term market is helping to support a choppy cash trade with a range of $110-$120. Although last week’s Cattle on Feed report was bullish for the market in the near-term, traders are seeing weakness in the cash market in the coming months. The placement number from last week’s report, showing a 22% decrease from last year, may represent a good portion of the “disappearance” number. Calves were not put on feed, but instead have been put on other outside feeding programs like grass fed. Currently the supply is still tight but keeping track of the slaughter numbers is key going forward because cattle are being harvested at a much faster rate than expected. We could expect low numbers this week because of the holiday, but going into June and further into summer, expect those number to come back quickly.
The USDA estimated cattle slaughter came in at 110,000 head yesterday. This brings the total for the week so far to 220,000, down from 294,000 last week, and down from 248,000 a year ago. The USDA boxed beef cutout was down $5.92 at mid-session yesterday and closed $7.72 lower at $377.77. This was down from $409.47 the previous week and was the lowest the cutout had been since May 1. The cutout has fallen for ten straight sessions and has declined $97.62 or 21% off of its high from May 12.