Call the Market

Since last Friday, the feeder cattle complex has aggressively rallied and largely been the driving force of the cattle complex's upward trend. But in the next couple trading sessions, the market won't be without substantial pressure.

Over that same time frame, beginning Friday, Oct. 3, 2025, the spot November feeder cattle contract has rallied $11.85. On Tuesday afternoon, the CME Feeder Cattle Index showed similar strength as it closed $0.77 higher at $364.24. Largely what has seemed to support this modest rally has been the uptick in boxed beef demand, the continued support of feeder cattle sales across the countryside and, once again, another new announcement that an additional case of New World screwworm (NWS) has been detected in Mexico, roughly 170 miles from the U.S./Mexico border. While it may seem contradictory for the market to react bullishly to the news of yet another case of NWS because at any point that could be a battle we face on our side of the border, the continued finding of new cases of NWS likely means the border won't open anytime soon and U.S. feeder cattle supplies will remain thin and in high demand.

But it's been interesting to watch sales across the countryside and note their price reports to see the vast difference in price trends since the fall run has really gotten underway over the last two to three weeks. Although, buyers know feeder cattle supplies are historically low and not going to be replenished anytime soon, they've been somewhat cautious about what they're buying. Normal, calves that are not weaned and unvaccinated have sold at a significant discount, typically ranging anywhere from $15.00 to $30.00 cheaper, as buyers simply can't afford to take that much of a risk on those cattle when they're still selling at record high prices.

But even though we've seen robust demand in both the countryside and the futures complex over the last three trading days, the market is going to be faced with significant pressure throughout the remainder of the week as traders must decide if they possess enough support to break through the market's resistance. On Tuesday afternoon, the November feeder cattle contract closed at $364.25; the market's resistance threshold is $364.00. At Wednesday's open, traders will be pressured to send the contract back below that threshold. And while the additional support of stronger boxed beef prices has been helpful, it's yet to be seen what fed cash cattle prices are going to do this week and at best it's assumed prices will trade steady.

So, while we've had a fruitful couple of trading days, it wouldn't be surprising to see the market faced with opposition throughout the remainder of the week as fundamental support isn't stacking up enough for traders to feel confident about keeping the contract above its resistance threshold. But as always, time will tell.

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

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