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The Cattle futures markets gap opened lower on Friday as news from the White House sent prices reeling. In an attempt to lower beef prices, the US will allow for the next three months additional ground beef to come in tariff free. There will be 300,000 metric tons of product for ground beef imported with no out of quota tariff. This beef will be sold at 25% below current market prices for the American consumer. “This deal will reduce prices for Americans while giving space for our Great American Beef Herd to grow again” the post stated. I guess I forgot the power of the tweet in my statement on Thursday. This news pressured futures and cash prices early as the selling was fast and furious. The good news for the market was futures didn’t go limit down and price stabilized fairly quickly. The open saw September Feeder Cattle break down to its low at 321.325, consolidate and then work higher the rest of the session to its high at 329.475 and then settle near the high at 329.025. October Live Cattle fell to its low at 212.675 and then reversed course and traded higher the rest of its session to the high at 218.225. It settled near the high at 217.925. The reversal was likely a short-covering rally as we headed into the weekend and the uncertainty that the Cattle on Feed report would bring to the market so traders reduced exposure. I had a lot of people talking on how it will probably be a bullish Cattle on Feed report and this early news release was a way to temper that report. The results are below and looking at the placements we could consider the report bullish as the placements came in well below expectations. Will that have a positive effect on the market on Monday? Normally, I would say yes but with the border with Mexico scheduled to open on Monday, who knows what the market reaction will be, in my opinion. The breakdown took cattle prices to new lows for the down move and the rally took price back to test resistance. We could look at this as a bullish reversal technically but the trade will be watching the border and cattle movement which could temper sentiment. We’ll see!... The early collapse in Feeders took price near support at 321.00 and the rally breached resistance at 329.075. Settlement was just under resistance. If price takes out the Friday high, we could see a test of resistance at 332.05. Resistance then comes in at the declining 8-DMA now at 333.10. A failure from settlement could see price test support at 326.875. Support then comes in at 321.00. The opening breakdown in October Cattle saw price open below support at 214.325. It attempted to rally, trading up to the key level at 215.60 and failed to hold it and fell to its low. It found support at the low and rallied past resistance at 217.75. It was able to settle above resistance. A rally past the Friday high could see price test resistance at 218.625. Resistance then comes in at the declining 8-DMA at 219.20 and then the key level at 220.05. A failure from settlement could see price test support at 215.60 and then 214.325.
The Feeder Cattle Index decreased and is at 341.00 as of 08/20/2026 settlement.
Boxed beef cutouts were lower as choice cutouts fell 4.24 to 385.69 and select dropped 2.42 to 361.32. The choice/ select spread narrowed and is at 24.37 and the load count was 91.
Friday’s estimated slaughter is 99,000, which is below last week’s 100,000 and last year’s 100,872. Saturday slaughter is expected to be 15,000, which is above last week’s 1,000 and last year’s 2,911. The estimated total for the week (so far) is 523,000, which is above last week’s 517,000 and below last year’s 555,676.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trade has been light on moderate demand in Nebraska. Compared to Wednesday, live purchases in Nebraska have been unevenly steady from 223.00-226.00, mostly 225.00-226.00. The last established dressed market in Nebraska was Thursday at mostly 356.00. Negotiated cash trade has been limited on moderate demand in the Western Cornbelt. There have been a few live purchases from 220.00-225.00 and a few dressed purchases from 350.00-355.00, but not enough at any one price level for an adequate market test. The last established market test in the Western Cornbelt was Thursday with live purchases from 225.00-226.00, mostly 225.00, and dressed purchases at mostly 355.00. Last weeks market in Kansas was at 228.00.
The USDA is indicating cash trades for live cattle from 221.00 – 227.00 and from 350.00 – 360.00 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 11.1 million head on August 1, 2026. The inventory was 2 percent above August 1, 2025.
Placements in feedlots during July totaled 1.42 million head, 11 percent below 2025. Net placements were 1.37 million head. Placements were the lowest for July since the series began in 1996. During July, placements of cattle and calves weighing less than 600 pounds were 310,000 head, 600-699 pounds were 215,000 head, 700-799 pounds were 320,000 head, 800-899 pounds were 322,000 head, 900-999 pounds were 185,000 head, and 1,000 pounds and greater were 70,000 head.
Marketings of fed cattle during July totaled 1.62 million head, 7 percent below 2025. Marketings were the lowest for July since the series began in 1996.
Other disappearance totaled 55,000 head during July, 8 percent above 2025.
Trade Strategy:
February 2027 Live Cattle Options Conservative Strategy
Sell the February 2027 Live Cattle 250/230 put spread at 17 cents.
- Premium collected: $6,800, less commissions and fees
- Maximum risk: $1,200, plus commissions and fees
- Margin requirement: $1,104
- Risk management: Consider limiting risk to 200 points ($800) plus commissions and fees
- Profit objective: Work a bid to buy back the spread at 7 cents
- Potential gain: Approximately $4,000, less commissions and fees
February 2027 Live Cattle Options Aggressive Strategy
Buy the February 2027 224 call and sell the February 2027 234/224 put spread.
- Net cost to enter: Even money, excluding commissions and fees
- Margin requirement: $2,884
- Risk management: Limit risk to 500 points ($2,000) from entry
- Market outlook: We believe February cattle have the potential to rally back into the mid-230s
- Profit objective: If the market reaches that target, consider offering the three-way option position at 800 points
- Potential gain: Approximately $3,200, 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
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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.
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