Cattle Markets End Week on a Positive Note
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The Cattle futures markets started the week on a high note, gapping higher and rallying on Monday. The rally didn’t last and we saw a pullback on Tuesday to the Monday low. The gap remained and price recovered on Wednesday. A new high on Thursday and then a lower open on Friday which saw Feeders take the lead and help the Live Cattle bounce back on Friday to new highs for the week. Essentially, the lead futures retraced most of last week’s breakdown with Feeders Skewed because of the transition to the November contract which was trading lower than the October contract. The Cattle on Feed Report set the tone for the market this week with its bullish placements and on feed numbers, in my opinion. Traders seemed to have a change of heart this week and may be expecting cash prices to bounce back from these lower levels as fundamentally we haven’t changed, as shown by the report, in my opinion. This is with slaughter numbers decimated because of “ICE “ activity in Kansas that sent slaughter numbers into the tank as workers called in sick because of worries of being detained. This also affected feedlots and other sectors which puts animals in danger because of the disruptions causing financial damage to those involved. This could linger into next week as workers are wary of these operations. So, it seems there is always something new to hurt cattle prices but actually keep beef prices high which is the opposite of what the government is supposedly trying to accomplish with its antics. Just when you thought that was all they could throw at the market that could hurt cattle prices… The Santa Teresa, New Mexico port is now open and after Thursday’s slow start of 400 cattle crossing it is close to the expected 750 per day initial number expected with 700 crossing on Friday. Next month if all goes according to the USDA’s plan we will have the Columbus , New Mexico port opened. I haven’t seen any posts on whether the USDA will then start letting cattle come in through the Texas ports. The Texas commissioner is calling for Texas to re-open but the USDA seems to be mum on that subject. Eventually they will open also but I haven’t seen any timetable on Texas like we have seen for Arizona and New Mexico. Santa Teresa is the port where most cattle enter from Mexico with 43% of the cattle. There were 6,400 head crossed from the two open ports this week. Will the opening have a dramatic effect on cattle going into feedlots and ease our short cattle numbers? That is a question that can only be answered through the passage of time and no screwworm crossing over with the Mexican cattle. That would shut the ports according to the USDA. Cutouts have stayed in a consistent range and packers are enjoying the lower cattle prices and steady cutout prices. They have been managing the slaughter numbers even as they are making money because in my opinion they know if they go hog wild and slaughter cattle it would pressure cutout prices and thin the herd faster than they want. This would lead to a bigger shortage of cattle and soaring prices for the packer if they took full advantage of the low cattle prices. I am being told from multiple sources that cattle supply will tighten further even with the packer discipline, so they remain careful. If the government can stay out of the way we could see cattle prices move higher and buyers of feeder cattle are still buying cattle with high break-evens as limited supply forces their hands if they want to stay in business, in my opinion. Expectations are for further declines in placements going forward, even with the Mexican cattle coming in. We’ll see!... November Feeder Cattle opened higher, traded to the low at 327.525, reversed and made an early high before breaking down to test the low. Price rebounded and raced to the session high at 333.125 and then worked lower to settle at 331.975. The breakdown stalled above support at 326.875 and the high tested resistance at the 50-DMA on the continuous chart at 332.45. A rally past the high could see price test resistance at 335.975. Resistance then comes in at 337.575. A failure from settlement could test support at 329.075. Support then comes in at 326.875. December Live Cattle opened lower and struggled. It traded both sides of unchanged and then traded down to the low at 219.70. Price turned around as Feeder Cattle led the way higher and price rallied to its high at 223.20. It dipped into the close and settled at 222.15. The breakdown tested support at the short-term moving averages and the key level at 220.05. The rally stalled just below resistance at 223.275. If settlement holds price could re-test resistance at 223.275. Resistance then comes in at 224.55. A failure from settlement could see price re-test support at 220.05. Support then comes in at 218.625.
The Feeder Cattle Index increased and is at 338.79 as of 09/24/2026 settlement.
Boxed beef cutouts were higher as choice cutouts jumped 2.71 to 378.83 and select surged 3.66 to 355.76. The choice/ select spread narrowed and is at 23.07 and the load count was 112.
Friday’s estimated slaughter is 87,000, which is below last week’s 101,000 and last year’s 91,397. Saturday slaughter is expected to be 8,000, which is even with last week and above last year’s 536. The estimated total for the week (so far) is 484,000, which is below last week’s 529,000 and last year’s 558,540.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade in Nebraska and the Western Cornbelt has been light on moderate demand. Compared to Thursday in Nebraska dressed purchases have been steady to 5.00 lower at mostly 345.00. The last established live market test in Nebraska was last week at mostly 222.00-223.00. Compared to Thursday in the Western Cornbelt, live purchases have been steady at mostly 220.00. The last established dressed market test in the Western Cornbelt was last week at 350.00.
The USDA is indicating cash trades for live cattle from 219.00 – 223.00 and from 342.00 – 355.00 on a dressed basis (so far) for the week.
Trade Strategy:
February 2027 Live Cattle Options Strategy
Sell the February 2027 Live Cattle 250/230 put spread at 17 cents.
- Premium collected: $6,800, less commissions and fees
- Maximum risk: $1,200, plus commissions and fees
- Margin requirement: $1,104
- Risk management: Consider limiting risk to 200 points ($800) plus commissions and fees
- Profit objective: Work a bid to buy back the spread at 7 cents
- Potential gain: Approximately $4,000, less commissions and fees
- Premium collected: $1,250.00, less commissions and fees(250 points) per spread
- Maximum risk: $3,750, plus commissions and fees per spread
Feeder Cattle Opportunity:
Sell the January 2027 Feeder Cattle 330/320 put spread for 700 points a $3,500.00 credit. Buy
the March Feeder Cattle 340 Call for 450 points a $2,250.00 debit.
**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
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