Cattle markets turned lower late in Friday’s session, erasing earlier gains and raising concern about the short-term outlook, even as the broader week still reflected strong performance.
Live and feeder cattle futures both traded strongly higher earlier in the day before reversing course and closing in the red, a move analysts say sends a bearish technical signal.
David Ericson with Ag Optimus in Akron, Iowa, said the late-session shift stands out.
“This is not a good look from a technical standpoint,” Ericson said. “We went up and we made a really big high and we reversed and we closed lower.”
Despite Friday’s downturn, the weekly picture had been notably strong. June live cattle added $7.35 on the week, while feeder cattle climbed $10.25. Lean hogs, meanwhile, slipped $1.55.
The strength was supported in part by gains in the boxed beef market. Choice cuts were up $2.52 for the week, with Select rising $2.10. Movement, however, lagged slightly behind the previous week, with about 425 loads traded so far compared to 469 the week prior.
Slaughter pace also picked up, with weekly totals running ahead of last week’s levels, adding another layer to the evolving supply picture.
Still, Ericson cautioned that the reversal in futures could outweigh otherwise supportive fundamentals in the near term.
“Normally I would say that this is not a very good sign for the live cattle moving forward — or the feeder cattle for that,” he said.
At the same time, he noted the market is operating under unusual conditions, particularly following a dramatic surge in cash cattle prices.
“This is not a normal time frame,” Ericson said. “Normally we don’t see a $12 jump in the cash market.”
Even so, the way the market closed Friday is hard to ignore, he said.
“The action and the way that we closed is not a good sign for the livestock overall,” Ericson said.
Traders will now look to next week’s trade for confirmation, with Monday’s opening expected to set the tone after a volatile end to the week.