For those interested I hold a weekly livestock webinar on Tuesdays. My next webinar will be Tuesday, November 10, 2026, at 3:15 pm. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
Live Cattle
Placements into feedlots have been down for the past 6 months and likely will continue along that path. This months on feed number was also down from last year. This has kept pressure on production which has been partially supported by increased carcass weights. This hasn’t been enough to take care of consumer demand leading to record imports. The record imports and anticipation of a continued need to increase imports next year keep the highlight on the tight fundamentals. With consumer demand expected to remain strong into the next year, we expect the packing industry to lose control of the cash market as we move towards 2027 and into the spring demand season. With that in mind we have the following trade idea:
Sell the April Live cattle 250/230 put spread for 1600 points. The maximum risk is 400 points per spread. Suggested risk is 250 points on a GTC stop loss or 1K per spread plus commissions and fees. Look to buy back at 800 points for a 800-point gain or $3200 per spread less trade costs and fees.
Margin 1119.00 per spread.
Feeder Cattle
Feeder Cattle supplies are tight in my opinion and producers have been aggressive in purchasing cattle as a result. With numbers expected to continue to be tight, our expectations are for buyers to remain aggressive in the feeder market. We are looking for the market to bounce back and here is a trade idea for the Feeders:
Sell the March Feeder Cattle 350/330 put spread for 16 cents OB. Risk no more than 250 points per spread on a GTC stop loss. Work to buy back the spread at 7 cents for a gain of 9 cents per spread or $4500 per less commissions and fees.
Margin per spread -$1328.00
Hogs
Funds are record short in the hog market and at some point, they will cover their short positions. We are coming into the holiday seasonal and we expect ham demand to support hogs in the near future. This could spur the shorts and lead to a recovery in the hog market. Spring and summer hog prices are in the low end of their trading range and with the cash market putting in lows we haven’t seen since 2021, producers will not be enthused to increase hog supply and with feed prices expected to be strong, they will likely keep weights down. We expect hogs to bounce back as we move forward and here is a trade idea:
Sell the July 2027 hog 110/95 put spread for 13 cents or a $5200 collection. Maximum risk is 200 points or $800 per spread plus commissions and fees. Work an order to buy the spread at 6 cents or $2800 per, less trade costs and fees.
Margin 538.00
**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
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