Cattle Markets Break Down - Erase Weekly Gains
If you would like to receive more information on the commodity markets, please use the link to join our email list - Sign Up Now
For those interested I hold a weekly livestock webinar on Tuesdays. My next webinar will be Tuesday, October 06, 2026, at 3:15 pm. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
The Cattle futures markets had a rocky week of trading, seeing up and down price action that saw price break down to last week’s low and then a new high put in for the recent up move early in the week. The early breakdown was likely the result of continued worries about ICE action that kept workers from the slaughter houses the previous week. The recovery and rally to a new high was expectations for higher slaughter to make up for the weak numbers last week as workers started coming back as ICE went home. The cutout was moving higher into the middle of the week and maybe would lead to higher cash prices. But cutout prices faded as slaughter levels normalized and cash prices sank up north with cattle trading as low as 217.00 as weather and heavy cattle weighed on sentiment. This led to futures breaking down on Friday to support levels. This also put futures for Fats into the middle of the recent consolidation band price it has fallen into. The consolidation band for the Fat market is the low from 9/22 at 218.775 and the 9/30 high at 223.85. December settled at 221.475 with the Friday high at 221.475 and the low at 220.95. November Feeders has had a strong rally since taking over as the lead contract based on volume. It has rallied since taking over on 9/23 as the lead contract. It made its low at 322.65 on 9/23 and rallied to 336.875 on 10/01. Friday saw a severe pullback as the index was expected to decline as futures opened unchanged, made the high at 336.40 and then collapsed, falling to the low at 330.725 as traders lightened positions going into the weekend. It settled near the low at 331.15. We’ll see!... The open put the high just above the key level at 335.975 and the crash took price to just above support at the flattening 13-DMAA now at 329.95. There is a lot of congestion in this area with short and long-term moving averages coiled in this area with settlement right at the flattening 50-DMA at 331.125. If price can hold settlement, it could re-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 continued its struggles at resistance. The 223.275 continues to limit upward movement and price gave way, stopping just above the flat 13-DMA now at 220.725. 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. The flattening 50-DMA is just below at 219.85. Support then comes in at 218.625.
The Feeder Cattle Index decreased and is at 336.84 as of 10/01/2026 settlement.
Boxed beef cutouts were mixed as choice cutouts dropped 2.60 to 374.19 and select increased 1.60 to 354.49. The choice/ select spread narrowed and is at 19.70 and the load count was 119.
Friday’s estimated slaughter is 100,000, which is above last week’s 87,000 and last year’s 93,072. Saturday slaughter is expected to be 38,000, which is above last week’s 8,000 and last year’s 12,409. The estimated total for the week (so far) is 548,000, which is above last week’s 484,000 and below last year’s 567,960.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade in Nebraska and the Western Cornbelt has been mostly light on light to moderate demand. Dressed purchases in Nebraska were 345.00, steady compared to Thursday. In Nebraska, the last established live market test was Thursday at 220.00-222.00. In the Western Cornbelt, there were a few live purchases from 218.00-220.00, mostly 220.00. Not enough for an adequate market test. The last established market test for live purchases in the Western Cornbelt was Thursday, mostly 219.00-220.00. The last established market test for dressed purchases was Thursday from 345.00-350.00.
The USDA is indicating cash trades for live cattle from 217.00 – 222.00 and from 345.00 – 352.00 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
Fax: 312.256.0109
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.