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.
The Cattle futures markets crashed early on Friday with the November Feeder Cattle crashing through its gap and testing its September 18th low and the January contract which is the lead contract based on volume falling apart but stalling just above its gap established also on September 18th. The December Live cattle contract closed its gap on Thursday and kept on falling in line with the Feeder Cattle taking out its September 18th low but stabilizing at 210.975 support level. The futures decline has had a chilling effect on the cash markets with fat cattle breaking down to 208.00 on the mandatory report and the Feeder Cattle index dropping 14 handles after peaking at 351.43. The cutout continues to trade within its 360.00 – 380.00 band with the index at the extreme low end of the band. The packer slowed slaughter this week after a 3-week surge above 540,000 head. This is a little surprising as they were able to take cash down on both dressed and live cattle. They are making money but maybe they realize if they keep slaughter levels high, they will be on the short end of the stick sooner, rather than later. Supplies are tight even though cattle prices haven’t been able to reflect that aspect. Cattle carcass weights are at record highs and there are very heavy cattle out there that the packer has been able to procure at the low end of the price action that has kept the pressure on the producer. With the pressure futures have been under, this has given the packer control of the price action. Futures traders have gone from exceedingly bullish after making lows in late August to exceedingly bearish since peaking in late October, taking price back close to the August lows. The positive thing about the Friday trade was we held at support and didn’t flush down below the lows on the continuous chart. We saw a strong short-covering rally that created potentially bullish signals if we can get upside follow-through on Monday. We’ll see!… January Feeder Cattle made its low at 312.05, which is just above the gap close at 312.00. It made the high on the open at 320.35. Settlement was near the high at 318.375. It formed a Hammer candlestick which could indicate a hammering out a low if we can take out the Friday high on Monday. The low tested support at 311.90. If price can hold settlement, it could test resistance at 321.00. Resistance then comes in at 326.875. A failure from settlement could see price re-test support at 314.20. Support then comes in at 311.90. December Live Cattle made its low at 210.85. This tested support at 210.975. The high came in at the open at 214.60. It settled near the high at 214.05, also forming a Hammer Candlestick. Settlement was below the key level at 214.325. If settlement holds, price could test resistance at 215.60. Resistance then comes in at 217.725. A failure from settlement could see price re-test support at 210.975. Support then comes in at 208.80.
The Feeder Cattle Index fell and is at 337.41 as of 11/05/2026 settlement.
Boxed beef cutouts were mixed as choice cutouts decreased 0.77 to 360.79 and select increased 1.24 to 353.56. The choice/ select spread narrowed and is at 7.23 and the load count was 116.
Friday’s estimated slaughter is 93,000, which is below last week’s 96,000 and last year’s 98,228573. Saturday slaughter is expected to be 11,000, which is below last week’s 13,000 and above last year’s 6,802. The estimated total for the week (so far) is 534,000, which is below last week’s 543,000 and last year’s 568,948.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade has been limited on light demand in the South Central Region. There have been a few live purchases at 215.00, but not enough for an adequate market test. The last established market test in the South Central Region was Thursday at mostly 218.00. Negotiated cash trade has been light on light demand in Nebraska and the Western Cornbelt. Compared to Wednesday in Nebraska, dressed purchases have been 5.00-8.00 lower at mostly 330.00. There have been a few live purchases from 210.00-212.00, but not enough for an adequate market test. The last established live market test in Nebraska was Thursday from 214.00-216.00, mostly 214.00. Compared to Thursday in the Western Cornbelt, live purchases have been steady to 4.50 lower at mostly 210.00. There have been a few dressed purchases at 330.00, but not enough for an adequate market test. The last established dressed market test in the Western Cornbelt was Tuesday from 238.00-245.00, mostly 340.00.
The USDA is indicating cash trades for live cattle from 208.00 – 219.00 and from 325.00 – 345.00 on a dressed basis (so far) for the week.
Trade Strategy:
February 2027 Live Cattle Options Strategy
Sell the February 2027 Live Cattle 260/240 put spread at 18 cents.
- Premium collected: $7,200, less commissions and fees
- Maximum risk: $800, plus commissions and fees
- Margin requirement: $1,081
- Risk management: Consider limiting risk to 100 points ($400) plus commissions and fees
- Profit objective: Work a bid to buy back the spread at 11 cents
- Potential gain: Approximately $2,800, less commissions and fees
**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.