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October Feeder Cattle opened higher, traded to the session high at 360.35 and then collapsed. It broke down to the low at 355.30 then worked higher to settle in the middle of the range at 357.90. The early rally to the high failed to push past the rising 13-DMA at 361.00 which led to more profit taking in my opinion as we headed to the weekend. This pressured price and it tested support at my next major moving average support level – the 21-DMA. It is also rising and is at 355.05. Friday’s price action heeded the 21-DMA as bullish traders defended the key support level. It will likely be higher on Monday and will key the price action in my opinion. Feeder prices continue to blast higher in many places, trading to new highs over many weight classes yet again this week. But the Feeder Index stalled after making new all-time highs as somewhere someone is selling feeders at lower prices than the rest of the country. This led to a drop on Thursday CME report of over 4 bucks, possibly causing some liquidation from some traders. Friday’s index recovered most of the Thursday decline but couldn’t challenge the all-time high established with The September report which put the index at a new all-time high at 365.52. Supply remains tight and Mexican cattle is still banned from the US, keeping the Texas supply under water. There is a lot of pressure for the USDA to reopen the border with Mexico and they are in a no-win situation with that predicament. With the Texas supply so tight many want to see the border opened to supplies moving higher over there but the USDA will be under immense criticism and bullying if they allow cattle to come in from Mexico and it brings the screwworm to Texas sooner than it would have if the cattle were kept out of the state. With facilities to produce sterile flies a year to 3 years away from implementation, this could make the situation much worse for the Texan cattle industry. The USDA has said it would take 500 million flies per week to get the fly under control and pushed back to the jungles of Panama and we are currently producing 100 million flies per week in Panama. What a difficult situation for the USDA to be in! If they do start the movement of cattle into the US, I believe it would be a trickle of cattle, not a huge jump until they can be sure the Mexicans have been doing a good job of making sure the cattle coming in are parasite free. Some assume cattle will come in waves right from the beginning crashing feeder prices and overloading the feedlots. I don’t think they are correct in this thinking.  It didn’t happen when we reopened the border ever so briefly in May. We’ll see!... A breakdown from settlement could see price re-test support at the rising 21-DMA. Support then comes in at 354.55. If settlement holds, price could resistance at 358.875 and then the rising 13-DMA.

The Feeder Cattle Index increased and is at 363.96 as of 09/04/2025. 

October Live Cattle opened higher and ticked to the high at 237.375. The open tested the key short-term moving average, the 13-DMA now at 237.025 and it quickly turned south and broke down to the low at 235.025. It bounced and settled in the lower end of the trading range at 235.975. The breakdown took price just past support at 235.625 and it was able to hold, settling above it. Cattle prices continued its pullback on Friday as cash prices run in place. Cash prices made a new all-time high a couple of weeks ago at 244.25 and are drifting lower with the North limping into the weekend and the South trying to move to higher prices. This has taken the premium the North had over the South away as producers in the North seem complacent at these levels while the South senses a change in their arena as supplies continue to tighten. With cutout prices over the 400.00 mark, you would think producers would be clamoring for cash prices to break above 250.00 on the negotiated market. But instead, they are taking lower prices up North as the packer, now seemingly making money attempts to put the squeeze on and say they have more than enough cattle under their control. So, the producers say… I am making money …. Okay I’ll take your price because there is weakness in futures when before they didn’t care about the futures market and whether it was up or down. They just wanted to take price higher and make the packer pay for the problems they caused the producer during the Covid time period. Now, with prices at all-time extremes, they are starting to settle and let the packer push back. Granted, this retreat in the average price has occurred repeatedly after making  a new high so this week it is important for the producer to get their mojo back as the packer will see blood and look to devour the wounded prey, in my opinion. The cutout has pulled back some since making a new high except for the pandemic, but is still over 410.00 The load counts have increased on these recent  pullbacks, indicating the retail industry sees value at these levels. Some are saying the retailers are being more aggressive and are making some holiday purchases early as they fear a shortage going forward, in my opinion. This could send cutouts to even higher levels as the holiday seasonal approaches. We’ll see!... A failure from the Friday low could see price test support at the rising 21-DMA now at 233.975. Support then comes in at 232.75. If price can hold settlement, it could test the rising 13-DMA now at 237.025. Resistance then comes in at 238.125.

Boxed beef cutouts were lower as choice cutouts dropped 3.45 to 410.76 and select fell 2.58 to 385.19. The choice/ select spread narrowed and is at 25.57 and the load count was 120.

Friday’s estimated slaughter is 118,000, which is above last week’s 101,000 and below last year’s 125,699. Saturday slaughter is expected to be 6,000, which is above last week’s 2,000 and below last year’s 41,799. The estimated slaughter for the week (so far) is 487,000, which is below last week’s 565,000 and last year’s 547,805.

The USDA report LM_Ct131 states:  So far for Friday, negotiated cash trade has been mostly inactive on moderate demand in the Southern Plains. The last established market in the Texas Panhandle was Thursday at 242.00. The last established market in Kansas was Thursday from 242.00-243.00. Negotiated cash trade has been limited on moderate demand in Nebraska and the Western Cornbelt. The last established market in Nebraska was Thursday with live purchases from 242.00-243.00 and dressed purchases at 383.00. The last established market in the Western Cornbelt was Thursday with live purchases from 242.00-243.00 and dressed purchases at 383.00.

The USDA is indicating cash trades for live cattle from 238.00 – 245.00 and from 380.00 – 387.00 on a dressed basis (so far).

**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

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bdicostanzo@walshtrading.com

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