Cattle Markets Stabilize After Volatility, but Fundamentals Signal Caution
Mike Sands, on AgBull Media’s “Before the Bell” podcast, flags widening spreads, rising slaughter pace, and softening beef demand as key market drivers
Cattle futures and cash markets are attempting to stabilize after a volatile stretch driven by geopolitical developments and technical market adjustments, according to Mike Sands on the Before the Bell podcast.
Sands noted that while outside markets initially reacted sharply to global developments — particularly uncertainty surrounding Iran and the Strait of Hormuz — some of that movement has since retraced, leaving futures trading in a more modest, lower-volume environment with increased spread activity.
A key feature of the market has been unusually wide cattle spreads — particularly August–October and August–December — which began to show signs of correction. Meanwhile, cash trade has remained relatively quiet early in the week following a sharp rally the prior week. The April contract is carrying a notable $3–$4 premium over Southern Plains cash, compared to a more typical $0–$1 premium, implying futures prices near $248–$249.
Despite last week’s strong cash gains, Sands emphasized that underlying fundamentals appear less supportive. Increased fed cattle supply, weakening beef prices, and eroding packer margins — alongside ample packer inventories — are weighing on the outlook. Still, expectations remain for at least steady to slightly higher cash trade in the near term.
On the supply side, weekly slaughter is trending higher. Total kills are projected near 540,000 head, up 5,000–10,000 from the previous week, with fed slaughter around 440,000 — the largest since January. Sands indicated that slaughter could rise further into late April and into May and June, potentially reaching 445,000–450,000 by month-end and 450,000+ in early summer. Even so, that pace would still represent a slightly below-normal seasonal increase.
Meanwhile, beef values are beginning to soften. The blended cutout declined roughly $3, following a sharp, earlier surge from $365 to $400 between mid-February and mid-March — a move Sands characterized as largely “engineered” by tighter slaughter levels. The market is now working through the residual effects of that price spike.
There are, however, some constructive signals, Sands said. Strong sales volumes early in the week suggest improving movement at lower price levels, helping reduce inventories even if not fully clearing them. Sands added that further spread adjustments are likely as the market continues to rebalance.
The CME feeder cattle index held steady near $364.50, with most regional markets steady to slightly higher, though not enough to significantly shift the index.
On the demand side, export performance remains a concern. While there was a modest rebound in recent trade data, overall beef export volumes continue to lag. Sands pointed to persistently high U.S. beef prices as a key factor dampening international demand — a trend that has persisted in recent weeks and remains a headwind for the market.
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