Daily Livestock Report For June 3, 2020: Forward contracted and negotiated grid cattle

Packers have significantly reduced the number of cattle that they have contracted for delivery in the next few months. A number of factors have likely contributed to this: a) demand is highly uncertain and forward beef sales are sharply lower than a year ago; b) front end cattle supplies are heavy; c) slaughter capacity has increased but COVID remains a major wild card that could further disrupt slaughter and especially line speeds. Ultimately, if the packer does not see much supply risk and faces uncertain demand, the result is a decline in forward contracted cattle.