For those interested I hold a weekly livestock webinar on Tuesdays. My next webinar will be Tuesday, May 12, 2026, at 3:15 pm. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
Cattle futures opened higher and rallied to their session highs during the first 15-minutes of the day. June Live Cattle made its high at 253.725 and August Feeders rallied to its high at 370.40. Cattle markets then broke down and traded to their lows with June Cattle breaking down and trading to 248.70 and August Feeders traded to 361.60 for its low. Cattle drifted at the end of the day and settled near the lows at 248.90 while Feeders were able to come off its low a bit and settle at 364.225. In my opinion we are seeing a disconnect with futures and cash prices. Packers are paying record prices (260.50 for live cattle and 405.00 on a dressed basis) for cattle and producers are doing the same for feeder weight cattle (there were 813# steers sold for 416.75 in NE). Traders seem to be looking at cash like a deer in headlights disbelieving what they are seeing and are frozen in place in their disbelief. They seem to be saying cash is wrong and futures are right when it should be the opposite because cash is king. Producers are ignoring futures and saying you guys don’t know anything and the packer seems to be in agreement with the producer as they are paying up for cash while futures leak to lower prices. Futures will eventually have to move towards cash and the with the packer paying up for cattle early in the season, in my mind is an admission that cattle supplies are tight and will only get tighter as we move into the spring summer grilling season. So why are futures breaking down on a Friday while cash trades at record highs? People have said it is likely a righting of the basis as futures should be below cash. That might have been true in the past when the south was trading at a huge discount to the north and futures would need to be priced in my opinion at the lowest common denominator or we could potentially see lots of deliveries at the higher futures price then southern prices that were established in their limited trade negotiated market… well… that isn’t the case anymore as we are basically trading even within the regions. So why the selling? People are talking that the President and the Brazilian President are meeting and President Trump is going to agree to get rid of any tariffs on Brazilian beef. That is a stretch as they don’t like each other and The President in my opinion would not give any breaks to someone who works against him…. It has also been said that the packer is pressuring the market in hopes a prolonged selloff could pressure cash prices as we move towards the holidays and peak buying. People are also saying high gas prices will eat into beef demand… Yet the packer pays up for cash and futures traders will eventually have to move prices towards cash or face the consequences as there is also talk the packer has been offering to buy cattle through June at 260.00 to any willing takers. That doesn’t sound like a cash market that will come under pressure any time soon. If that is true and the packer is making that kind of commitment it is likely because they don’t see prices coming down as they have all the information and likely means the supply crunch will only get worse and let’s lock up cattle at all-time prices because the price of cattle may continue to set new all-time highs as we get deeper into the season. Beef prices have struggled and the packer is cutting slaughter. I don’t know how this works but I wonder what the record beef imports are doing to the cutout prices. Are these imports keeping beef supply honest while cattle supplies wither… The opposite from the fire and the pandemic. Ther are a lot of question marks out there but the price action in the cash markets indicate ever tightening supplies and they likely will get tighter in my opinion. We’ll see!… August Feeder Cattle tested resistance at the declining 8-DMA now at 370.125 during its opening rally. The breakdown took price down to the upward sloping trendline support at 362.225. The recovery into the close took price above the key level at 363.00. If Feeder Cattle can hold settlement, we may see price revisit resistance at 365.675. Resistance then comes in at the declining 13-DMA now at 367.80. A failure from settlement can take price lower and re-test support at the trendline which moves up to 362.80. Support then comes in at the flat 50-DMA now at 361.025. June Live Cattle’s opening rally saw price move past resistance at 252.00 and stall just under resistance at 253.75. The breakdown took price below support at the flattening 21-DMA now at 249.475. A failure from the low could see price test support at 248.30. Support then comes in at 246.975. If Live Cattle can retake the 21-DMA, it could test resistance at the rising13-DMA now at 250.325. Resistance then comes in at 252.00.
The Feeder Cattle Index released Friday increased and is at 374.83 as of 05/07/2026 settlement.
Boxed beef cutouts were higher as choice cutouts increased 1.45 to 388.39 and select increased 1.12 to 385.01. The choice/ select spread widened and is at 3.38 and the load count was 120.
Friday’s estimated slaughter is 92,000, which is above last week’s 90,000 and last year’s 91,279. Saturday slaughter is expected to be 13,000, which is above last week’s 10,000 and last year’s 1,116. The estimated slaughter for the week (so far) is 527,000, which is below last week’s 534,000 and last year’s 560,823.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade has been light on moderate demand in Nebraska and the Western Cornbelt. Compared to Thursday in Nebraska, live purchases have been unevenly steady at 260.00. The last established dressed market was Thursday from 402.00-405.00, mostly 402.00. Compared to Thursday in the Western Cornbelt, live purchases have been steady at mostly 260.00. The last established dressed market was Thursday from mostly 400.00-403.00. Negotiated cash trade has been inactive on light demand in the Southern Plains. The last established market test in the Texas Panhandle was Thursday with live purchases at mostly 256.00. The last established market test in Kansas was Thursday with live purchases from 256.00-260.00.
The USDA is indicating cash trades for live cattle from 253.00 – 260.50 and from 400.00 – 405.00 on a dressed basis (so far) for the week.
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Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
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