Cattle Market See Short-Covering in Front of COF

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The Cattle futures markets gap opened higher and rallied to their session highs. They had a mid-session collapse which closed the gaps as the markets traded down to their lows and a late recovery which saw the markets settle in the middle of their ranges. This was a continuation of the recovery from Thursday after the markets broke down to new lows for the down move. The cattle markets broke down to their lows as estimates for the Cattle on Feed report came out with expectations for a positive on feed number. The report was released after the close along with the semi-annual Cattle Inventory report. (See below) The CoF report was in line with expectations. The markets rallied on short-covering in my opinion even as the cash markets traded lower on the week as most trades were around 230.00 live and 365.00 dressed. These established prices were much lower than last week’s averages. The Feeder Index also continued its decline while Feeders recovered losses. The short-covering usually happens on strong breakdowns and then a lightening of positions in front of the report as traders protect profits. You never know how the report will come out. The cash market price decline is now in its fifth week since peaking in Mid-June. Cutouts remain soft and slaughter numbers continue to sag, with the packer using every available animal they control to limit their purchases on the negotiated market. High prices in the retail stores may finally be discouraging beef purchases by the consumer which have kept their normal prices high and with gas prices at lofty levels puts the consumer on the defensive, in my opinion. But, at least in my area there have been various cuts on sale every week for consumers to take advantage. We are nearing the last summer holiday and cutouts normally rise into the holiday so we may see some strength come back into the cash markets as we head into August. We’ll see!... September Feeder Cattle gap opened higher and rallied to the session high at 345.475. This was a test of resistance at 344.675 and trend line resistance at 345.325. Price stalled and then it broke down, closing the gap and making the session low at 337.25. Price bounced from here which was a re-test of support at 337.575 to settle in the middle of the range at 341.45. If settlement holds, it could revisit the Friday high. Resistance then comes in at 350.20. A failure from settlement could see price revisit the Friday low. Support then comes in at 335.975. October Live Cattle gap opened higher and traded to the high at 224.125. The rally stalled just below the key level at 224.55. Price reversed and broke down to the low at 220.775. The low was just above support at 220.05 and the market rebounded and settled in the middle of the range at 222.50. If price can hold settlement, it could test resistance 223.275. Resistance then comes in at 224.55. A failure from settlement could see price test the Friday low and then the nearby 220.05 support level. Support then comes in at 218.625.

The Feeder Cattle Index decreased and is at 349.65 as of 07/23/2026 settlement. 

Boxed beef cutouts were lower as choice cutouts decreased 1.63 to 361.24 and select decreased 2.04 to 346.71. The choice/ select spread widened and is at 14.53 and the load count was 131.

Friday’s estimated slaughter is 103,000, which is above last week’s 89,000 and last year’s 95,843. Saturday slaughter is expected to be 14,000 which is above last week’s 3,000 and last year’s 4,617. The estimated total for the week (so far) is 528,000, which is above last week’s 525,000 and below last year’s 553,766.

The USDA report LM_Ct131 states: Thus far Friday negotiated cash trade has been very limited on light to moderate demand in all feeding regions. Not enough purchases in any region for an adequate market test. The latest established market in any feeding region was on Wednesday with early live and dressed purchases in Nebraska and the Western Cornbelt at 230.00 and 365.00 respectively. Very limited live purchases from 230.00-231.00 were reported in Kansas, however not enough for an adequate market test. The last established market test in Kansas was last week with live purchases from 235.00-238.00, mostly 237.00-238.00.

The USDA is indicating cash trades for live cattle from 228.00 – 232.00 and from 360.00 – 375.00 on a dressed basis (so far) for the week.

 United States Cattle on Feed Up 2 Percent 

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.4 million head on July 1, 2026. The inventory was 2 percent above July 1, 2025. The inventory included 7.12 million steers and steer calves, up 3 percent from the previous year. This group accounted for 63 percent of the total inventory. Heifers and heifer calves accounted for 4.25 million head, up slightly from 2025. Placements in feedlots during June totaled 1.40 million head, 3 percent below 2025. Net placements were 1.35 million head. During June, placements of cattle and calves weighing less than 600 pounds were 325,000 head, 600-699 pounds were 225,000 head, 700-799 pounds were 300,000 head, 800-899 pounds were 309,000 head, 900-999 pounds were 160,000 head, and 1,000 pounds and greater were 80,000 head. Marketings of fed cattle during June totaled 1.66 million head, 3 percent below 2025. Marketings were the lowest for June since the series began in 1996. Other disappearance totaled 50,000 head during June, 6 percent below 2025.

 July 1 Cattle Inventory Up Slightly 

All cattle and calves in the United States on July 1, 2026 totaled 94.2 million head, slightly above the 94.0 million head on July 1, 2025. All cows and heifers that have calved totaled 38.1 million head, unchanged from the 38.1 million head on July 1, 2025. Beef cows, at 28.5 million head, are down 1 percent from a year ago. Milk cows, at 9.65 million head, are up 2 percent from previous year. All heifers 500 pounds and over on July 1, 2026 totaled 14.7 million head, 1 percent above the 14.6 million head on July 1, 2025. Beef replacement heifers, at 3.80 million head, are up 3 percent from a year ago. Milk replacement heifers, at 3.60 million head, are up 3 percent from previous year. Other heifers, at 7.30 million head, are 1 percent below a year earlier. Steers 500 pounds and over on July 1, 2026 totaled 13.9 million head, up 1 percent from July 1, 2025. Bulls 500 pounds and over on July 1, 2026 totaled 1.90 million head, unchanged from previous year. Calves under 500 pounds on July 1, 2026 totaled 25.6 million head, unchanged from a year earlier. Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 13.2 million head on July 1, 2026, up 2 percent from previous year. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 86.1 percent of the total cattle on feed on July 1, 2026, up 1 percent from previous year. The total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots), at 33.6 million head, is down 1 percent from the 33.8 million head on July 1, 2025. Calf Crop Down 2 Percent The 2026 calf crop in the United States is expected to be 32.5 million head, down 2 percent from last year. Calves born during the first half of 2026 are estimated at 23.9 million head, down 2 percent from the first half of 2025. An additional 8.60 million calves are expected to be born during the second half of 2026.

**Call me for a free consultation for a marketing plan regarding your livestock needs.**

Ben DiCostanzo

Senior Livestock Analyst

Walsh Trading, Inc.

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