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Cattle Markets Slaughtered
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The Cattle futures markets crashed on Friday with some deferred Feeder markets briefly going down the limit. After a steady grind higher in the cattle markets since making lows at the end of August culminated in a peak on Monday, month-end profit taking took place in the markets. Futures may have moved too fast to the upside while taking cash markets with them higher. Cash peaked on this run on Tuesday at 230.00 as futures were working lower. The break in futures kept on coming and pressure came in the cash markets adding more fuel to the downside in futures. This pressured cash, which continued to weigh down futures, culminating is cash trades below 220.00 to 218.00 on the mandatory negotiated report. Fats dragged down Feeder Cattle with some deferred contracts going down limit briefly on Friday. January Feeders settled near the limit to the downside as the new lead contract based on volume. The month end selling pressure was probably exacerbated by the upcoming midterm election jitters as the Equity markets also crashed as Crude Oil prices surged at various points during the session. Economic worries are running high as concerns over the election mounts. Slaughter levels are running comparatively hot as the packer continues to profit while producers suffer, in my opinion. This could work against the packer in the future as cattle numbers continue to be tight. The Cattle on Feed report was bullish, in my opinion but couldn’t support futures which leads one to think the run up in price before the report was in anticipation of a bullish report. With month end and the upcoming election, the valve was opened and the downward spiral gathered steam. Now with November starting on Monday, do traders reload or do they wait for the election to determine what they think will happen to the economy and especially the consumer after the mid-term results are in to position themselves in futures? We’ll see!... January Feeder Cattle made its low at 331.20 and its high at 341.50. Settlement was near down limit at 331.775. Settlement was just above the rising 50-DMA now at 331.65. If price can hold settlement, it could reclaim some or more of Friday’s loss. A failure from settlement could see price test support at 329.075. Support then comes in at 326.875. December Live Cattle made its low at 220.475. The high came in at 225.75. It settled near the low at 220.95. December cattle settled below its rising 50-DMA now at 221.35 on the continuous chart. If settlement holds, price could consolidate within Friday’s range. A failure from settlement could see price test support at 220.05. Support then comes in at 218.625.
The Feeder Cattle Index dipped lower and is at 341.26 as of 10/29/2026 settlement.
Boxed beef cutouts were mixed as choice cutouts decreased 2.62 to 364.66 and select increased 0.35 to 351.98. The choice/ select spread narrowed and is at 12.68 and the load count was 126.
Friday’s estimated slaughter is 96,000, which is even with last week and below last year’s 98,228. Saturday slaughter is expected to be 13,000, which is below last week’s 20,000 and above last year’s 2,167. The estimated total for the week (so far) is 543,000, which is below last week’s 546,000 and last year’s 557,322.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade has been moderate on light to moderate demand in the South Central Region. Compared to Thursday, live purchases have been steady at mostly 225.00. Negotiated cash trade has been light on light demand in Nebraska. Compared to Thursday, live purchases have been 1.00 lower at 224.00. The last established dressed market in Nebraska was Thursday at mostly 348.00. Negotiated cash trade has been limited on light to moderate demand in the Western Cornbelt. There have been a few live purchases from 218.00-220.00, but not enough for an adequate market test. The last established market test in the Western Cornbelt was live purchases Thursday from 222.00-224.00 and dressed purchases Wednesday from 350.00-360.00.
The USDA is indicating cash trades for live cattle from 218.00 – 230.00 and from 345.00 – 365.00 on a dressed basis (so far) for the week.
Trade Strategy:
February 2027 Live Cattle Options Strategy
Sell the February 2027 Live Cattle 260/240 put spread at 18 cents.
- Premium collected: $7,200, less commissions and fees
- Maximum risk: $800, plus commissions and fees
- Margin requirement: $1,081
- Risk management: Consider limiting risk to 100 points ($400) plus commissions and fees
- Profit objective: Work a bid to buy back the spread at 11 cents
- Potential gain: Approximately $2,800, less commissions and fees
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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