April cattle seems to be in a bit of consolidation right now with yesterday’s sell-off ultimately resulting in an inside day because of the big rally we had on Monday. Demand seems to be slowing with packer margins down substantially over the past few weeks and with the 5 day forecast, weights are looking to be higher than normal due to the dry forecast. Cash cattle in Kansas traded at $124 on light volume, still leaving a large premium to the futures market. Some news that sparked the rally on Monday was cash trading $2 higher along with the news of Australia’s significant drop off of their beef exports because of the drought and wildfires that are going on.

The USDA estimated cattle slaughter came in at 123,000 head yesterday. This brings the total for the week so far to 244,000 head, up from 218,000 last week, and up from 239,000 a year ago. The USDA boxed beef cutout was down 8-cents at mid-session yesterday and closed 9-cents lower at $209.56. This was down from $209.66 the previous week and was the lowest the cutout had been since January 3. The cutout is down from $214.28 a year ago. There was some light trade of cash live cattle trade reported in Kansas yesterday (856 head) at 124, which was at the top end of last week’s range. The COT report showed managed money traders were net sellers of 5,222 contracts of cattle for the week ending December 31, reducing their net long to 83,295.