Market Trends - February live cattle futures reached a four-week high, while January feeder cattle futures experienced a slight pullback after a six-week high, indicating potential market bottoms and sustainable price uptrends [1] - Improved technical postures in cattle futures markets are likely to attract chart-based speculators to the buy side [1] Cash Cattle and Boxed Beef - The USDA reported an average cash cattle trade of $221.21 per hundredweight, up $9.68 from the previous week, while boxed beef values have also shown improvement, encouraging buying in live and feeder cattle futures [3] - Recent wintry weather in the U.S. Plains states is expected to stress livestock, positively impacting price trends for futures [3] Consumer Demand - U.S. consumer demand for beef remains strong, particularly from retailers promoting beef cuts for holiday meals, with cattle carcass weights reaching an all-time high of 960 pounds, up 3 pounds from the previous week and 41 pounds higher than last year [4] - The increase in quality due to dairy/beef crosses is reducing the significance of the Select-grade category, likely leading to more prime cuts available during the holiday season [4] Supply Dynamics - Recent declines in cattle prices coincide with a critical decision period for cattle farmers regarding heifer retention for breeding, which could impact herd expansion in 2028 [5] - With input costs at near-record levels and prices still 25% higher than a year ago, farmers are incentivized to market cattle rather than retain them for breeding, suggesting tight cattle supplies through 2026 [5]

Group 1: Boxed Beef Market Trends - The US boxed beef prices have been declining significantly since the president's announcement to lower beef prices, with choice prices dropping from a record high of $416.01 to $381.39 and select prices from $390.00 to $362.09 [1] - The USDA reported daily boxed beef prices, which some speculate may be intentionally reported lower despite actual market conditions [5] Group 2: Cattle Futures Market Dynamics - Cash feeder indexes have shown an increase, with back-month feeders closing $9.25 higher, leading to expanded daily limits for futures [2] - The Live Cattle Cash Index has seen a rise from $92.00 in July 2020 to a recent high of $242.00, although it has slipped to $240.00 recently [7] - The National Feeder Cattle Index increased from $114.23 to $367.03, but has recently decreased to $358.78 [7] Group 3: Supply and Demand Factors - The US cattle supply is not in an expansion phase, leading to a situation where demand continues to outpace available supplies, indicating a potential equilibrium price issue [8] - The investment industry has recognized changes in supply and demand, with noncommercial interests increasing their long futures positions from 67,700 contracts in June 2020 to 202,150 contracts by January [9] Group 4: Market Sentiment and Future Outlook - Recent reports indicate that funds have reduced their net-long futures position to 101,726 contracts, suggesting a potential loss of interest from long-term investors in the cattle market [10] - There is speculation that long-term investors may be considering reallocating funds to other markets, such as corn, based on favorable longer-term fundamentals [4][10]