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Feeder Cattle Strength Helps Fats Go Higher
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, and my next webinar will be Tuesday, October 07, 2025, at 3:15 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
November Feeder Cattle opened unchanged, traded lower in the early trade to the low at 351.35. It turned higher and rallied the rest of the session to the high at 355.825. Settlement was near the high at 355.425. The early breakdown took price to support at the rising 50-DMA now at 351.50. There was also trendline support just below the low at 351.275. There wasn’t any news out about the screwworm and the conditional drug treatment sanctioned by the USDA to treat any potential screwworm infestations due to the government shutdown so traders sent price higher to just below resistance at the declining 8 & 13-DMAs now at 355.975 and 356.00 respectively. The rally also stalled below the Thursday high at 356.20. This was the gap open lower start to a decline to the 50-DMA as traders reacted to the screwworm drug news that had many believing the border will now open sooner rather than later to Mexican cattle. The USDA had indicated they will be coming out with a game plan in the middle of October but that is now up in the air, in my opinion. The Thursday low was below the Friday low so we have an inside candlestick formation. This is in a critical area in my opinion as we are right at the 50-DMA that has held on attempts to take price lower in recent sell-offs. The high is also at the short-term moving averages which are in a tight formation with the 21-DMA at 354.875. Whichever way the market overcomes could lead to the next directional move in the Feeder Cattle. We’ll see!... A breakdown from settlement could see price retest support at 250.20 and the rising 50-DMA. Support then comes in at 344.675. If price can press forward above resistance at 354.55, it could test resistance at the flattening 21-DMA now at 356.35. Resistance then comes in at 358.875. The Feeder Cattle Index increased and is at 362.57 as of 10/02/2025. December Live Cattle opened higher rallied to an early high and then broke down to the session low at 233.00. It reversed course and rallied the rest of the session to the high at 234.675. It settled near the high at 234.50. The rally took the December contract into the middle of its recent trading range it has been in. The low of the range is at 231.75 and the high is at 236.45. I think the fats got lucky today as downside price action was stunted because the Feeder Cattle kept pushing higher. The market is essentially drifting as traders wait for the cutout to start its seasonal rally into the holidays. The cutout has collapsed since peaking on September 3rd at 416.01 to today’s 362.27. This has put the cash market in a freefall with cash prices breaking below 230.00 on a live basis to 227.00. This is from its all-time high at 248.000 on the mandatory report. Traders seem willing to keep the December contract in a holding pattern as cash breaks down, expecting the seasonals to kick in shortly. The price action is hovering just above support at 232.75 and the rising 50-DMA now at 232.55 and near the short-term moving averages with the 8, 13 and 21-DMAs at 234.60, 235.025 and 234.25 respectively. Support must hold in my opinion or we could see the short-term moving averages flow downward and indicate a downtrend starting. The opposite would happen and we see the uptrend resuming with a rally and a flowing upward of the short-term moving averages. Traders are waiting to see if the producer can get back control of the cash market and turn it higher in the near term. If cash continues to tumble and the packer remains in control, I think its look out below…. The packer has righted its ship as the conversation is they are going to the weak sellers first and setting lower prices with them. They then go out and say we have enough cattle but I’ll buy them here. This is their old refrain that they lost control of as the panic bought cattle at ever higher prices. They have seemingly convinced the producer that cattle prices were too high and we are seeing the result of that idea with cash prices breaking down. Producers have told me they saw 250.00 as the top and we couldn’t get there on the negotiated mandatory report. The thought became, I am making money have to sell and then the price fell. Now with break evens rising and losses imminent can the producer bounce back?... We’ll see!... A failure from settlement could see price test support at 232.75. Support then comes in at rising 50-DMA. If price can hold settlement, it could test resistance at 235.625. Resistance then comes in at 238.125. Boxed beef cutouts were mixed as choice cutouts decreased 0.95 to 362.27 and select increased 1.98 to 345.38. The choice/ select spread narrowed and is at 16.98 and the load count was 163. Friday’s estimated slaughter is 91,000, which is above last week’s 88,000 and below last year’s 105,515. Saturday slaughter is expected to be 8,000, which is above last week’s 1,000 and below last year’s 11,771. The estimated slaughter for the week (so far) is 557,000, which is above last week’s 555,000 and below last year’s 611,571. The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade has been limited on moderate demand in the Western Cornbelt. There have not been enough live or dressed purchases for an adequate market test. The last established market test in the Western Cornbelt was Thursday with live purchases at 230.00 and dressed purchases at 360.00. Negotiated cash trade has been mostly inactive on light to moderate demand in all other feeding regions. The last established market in the Texas Panhandle was last week with live purchases at 237.00. The last established market in Kansas was last week with live purchases from 235.00-237.00. The last established market in Nebraska was live purchases at 230.00 Thursday and dressed purchases at 360.00 Wednesday. The USDA is indicating cash trades for live cattle from 227.00 – 233.00 and from 353.00 – 360.00 on a dressed basis (so far) for the week. **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. This article contains syndicated content. We have not reviewed, approved, or endorsed the content, and may receive compensation for placement of the content on this site. For more information please view the Barchart Disclosure Policy here.
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