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Live Cattle Futures Drop Amid Quiet Trading Activity

Live cattle futures are down as cash trade remains quiet, reflecting a steady trend in market prices. The latest trends in production and prices indicate challenges that may influence investor sentiment in the cattle market.

Date: 
AI Rating:   5
Market Overview
Live cattle futures have seen a decline of $1 to $1.25, suggesting a slight bearish sentiment in the market. With recent cash trade remaining quiet, many are compiling showlists, which could indicate lower liquidity and interest. The previous week's trading prices ranged from $196 to $198 in the southern regions, signaling stability but also a lack of upward momentum.

Feeder Cattle Trends
Feeder cattle contracts have also seen slight reductions, with values lower by 30 cents to $1.25 at midday. The CME Feeder Cattle Index increased by 18 cents to $273.95 on March 7, showing some resilience in price despite current downturns. The recent OKC feeder cattle auction had an estimated volume of 5,000 head, which is nearly half of the week prior, showing a decrease from last year's volumes. Although feeder steers did experience price increases, the general market trend remains subdued.

Production Forecast
The monthly WASDE update projecting beef production growth of 26.685 billion lbs for 2025 is notable as it reflects a positive outlook in the long term. This figure indicates an increase of 120 million lbs from the previous month, although there are adjustments with cuts in Q1 and expansions in other quarters. This mixed forecast may lead to fluctuations in stock prices as supply-demand dynamics shift over the year.

Wholesale Boxed Beef Prices
The National Wholesale Boxed Beef prices rose sharply with Choice boxes increasing by $4.74 to $323.32/cwt and Select boxes up by $2.54 to $309.49. An estimated slaughter of 115,000 head signifies a healthy processing activity, 13,000 head above the previous Monday, which could further support beef prices and influence investor expectations positively. However, considering the overall decline in live cattle futures, these price fluctuations might not fully counterbalance investor concerns.
Overall, despite an increase in boxed beef pricing, the market is largely influenced by the bearish trend in futures, emphasizing caution among investors looking at this segment.
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