Sort and Cull

Charged and ready for the week ahead, the cattle complex surpassed anyone's wildest beliefs on Monday. Between traders being given the first opportunity to trade Friday's bullish Cattle on Feed report, to the announcement that is expected to come soon from USDA on a plan to "help rebuild the American cattle supply, incentivize our great ranchers, and drive a full-scale revitalization of the American beef industry," the market was flooded with support throughout Monday's trade.

But what was especially interesting to watch is how the contracts closed Monday afternoon as once again, the furthest deferred feeder cattle contracts saw the biggest daily gains (closing $9.25 higher at their daily limit) and the spring 2026 live cattle contracts saw the biggest day-over-day advancements. The thing that those two sets of contracts have in common is that supplies are going to be inherently thin at that time.

For the spring 2026 live cattle contracts, we know that fewer placements have been made this summer than compared to years past, which will obviously affect fed cattle supplies next spring. And while yes, cattle are spending exorbitant amounts on feed and possess carcass weights commonly well-over 1,500 pounds for live steers and 1,300 pounds for live heifers, there still won't be enough supply around.

And, in terms of the feeder cattle contracts, one of the most important talking points about the herd being rebuilt that so many are forgetting to have is that when producers do decide to keep heifers back and actively make efforts to grow their herds, feeder cattle supplies are going to be slimmer as there won't be as many heifers being placed on feed.

The cattle market had a specular day Monday as it was fixated on its long-term fundamentals and for whatever reason, decided to give little credence to the news that broke during the weekend that a new case of New World screwworm (NWS) was detected less than 70 miles from the U.S./Mexico border. (Go here to see the full press release: https://www.usda.gov/… and see DTN's story at https://www.dtnpf.com/…)

It's not very often that the market's technicals decide to trade higher based on the market's long-term fundamental picture, but today, it sure did.

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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