Cattle Markets Surge into the New Year

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It was a happy start to the new year as cattle bulls took prices higher on Friday. Cattle futures broke out of their trading ranges on Friday, each making new highs for the up move since making their lows on November 25^th. February Live Cattle opened higher, made its low at 231.425 and rallied the rest of the session to the high at 236.30. It settled at 236.00. March Feeder Cattle also opened higher, making its low at 345.35 and rallying the rest of its session to the high at 353.525. It settled near the high at 352.95. Live Cattle took out resistance at 232.75 and 235.525. Feeder Cattle took out resistance at the 100-DMA and 350.20 on its surge in price. Feeder Cattle led the way as cash prices were strong during the few auctions held on Friday and expectations that we will see continued strong performance  next week as the new year starts. Cash cattle prices were strong on Wednesday lending hope that fat prices will continue higher into the new year. There was also another report of a screwworm close to the US border this week that looks like it will continue to keep the awaited opening of the border with Mexico for cattle imports on the back burner. Boxed prices also bounced back this week after breaking down after the Christmas holiday. This created expectations that beef demand was strong for the holidays and the retail industry will be refilling their coolers to keep consumers happy and consuming beef into the new year. I believe traders also for the moment put aside the Tyson plant closing in January as we have plenty of capacity remaining for cattle slaughter with the tighter cattle numbers we have and the expectations for numbers to get even tighter in 2026.  As far as the Mexican cattle is concerned, it could prove foolish and dangerous to open the border prematurely with Mexico as we are not producing enough sterile flies to send the screwworm back to the Panamanian jungles. Early in the discovery process reports were that we would need at least 500 million sterile flies per week to drive the screwworm south. The facility that is producing flies is capable of 100 million flies per week as of the last time I heard of their production ability. That is why facilities are being built, because we don’t have enough to drive them south even with winter around. A Mexican facility comes online reportedly in July and the US facility not until supposedly October Ish. With the fly staying near the US the USDA has to be uncomfortable with any thought of opening the border too soon. IT could jeopardize the Texas cattle industry. We’ll see! February Live Cattle may have jumped the gun on Friday’s rally as cash was quiet on Friday. We could see some consolidation if cash didn’t improve into Monday. If Live Cattle can hold settlement, we could see a test of resistance at 238.125. A breakdown from settlement could see a test of support at 232.75. Support then comes in at 230.425. If Feeder cattle can hold settlement, it could see price test resistance at 354.55. Resistance then comes in at 358.875. A breakdown from settlement could see price test support at 350.20. Support then comes in at the 100-DMA. Happy New Year everyone…

The Feeder Cattle Index increased and is at 350.22 as of 01/01/2026.

Boxed beef cutouts were higher as choice cutouts jumped 2.52 to 349.97 and select surged 4.54 to 346.92. The choice/ select spread narrowed and is at 3.05 and the load count was 85.

Friday’s estimated slaughter is 116,000, which is above last week’s 1078,000 and below last year’s 120,343. Saturday slaughter s expected to be 33,000, which is above last week’s 32,000 and below last year’s 35,798. The estimated slaughter for the week (so far) is 474,000, which is below last week’s 426,000 and below last year’s 504,893.

The USDA report LM_Ct131 states So far for Friday, negotiated cash trade has been limited on moderate demand in Kansas. There have been a few live purchases at 232.00, but not enough for an adequate market test. The last established market in Kansas was last week with live purchases at 229.00. Negotiated cash trade has been light to moderate on moderate demand in Nebraska and the Western Cornbelt. Compared to last week in Nebraska, live purchases have been 2.00 higher at 232.00 and dressed purchases have been 4.00 higher at 360.00. Compared to Wednesday in the Western Cornbelt, live purchases have been steady to 2.00 higher from 230.00-232.00. Dressed purchases have been steady to 4.00 higher at 360.00 when compared to last weeks light test in the Western Cornbelt.

The USDA is indicating cash trades for live cattle from 227.00 – 233.00 and from 355.00 – 360.00 on a dressed basis (so far) for the week.

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Ben DiCostanzo

Senior Livestock Analyst

Walsh Trading, Inc.

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