November 3, 2025
THE MARKETS
Packers added more purchases to the week on Saturday at higher prices and those developments sent futures higher on Monday. Box prices also showed early week strength. Texas show list was down and Nebraska and Kansas were higher. Show lists, without knowing how far out the packers are bought, are sometime poor indications of anything.
Light sales in the south at $235-$236. Fairly good volumes of cattle sold this past week in the north at $230 — $8 lower than the bulk of last week’s prices and $360 dressed — $10 lower. Hedged feeders chased the basis all week and those hedged in October were squeezed while December hedges were acceptable covers.
This past week’s slaughter at 559,000 head was down 14,000 from the previous week and 56,000 under last year. The weekly slaughter sometimes seems to happen “on the fly” as packers read the tea leaves of retail demand and make fine tuning adjustments to the slaughter levels. This week’s slaughter was in line to equal last week before quickly slowing the volume at week’s end.
CATTLE FUTURES
Live cattle opened and closed higher on Monday reflected higher prices paid on Saturday by packers.
The balance and appropriate trading levels for cattle futures is always re-adjusting. The relative levels for grain, feeder cattle and live cattle all fit into the formula for price levels. Grain futures are very liquid and are never pushed around as cattle operations price their grain. Cattle futures in both live and feeder contracts lack liquidity and can sometimes take longer periods to refine the proper relationships between each other.
Benchmarking. On Tuesday of each week, USDA releases a weighted average price report for all cattle sold the previous week. The report summarizes the distributed price levels for each category of sale such as Negotiated/Formula/Forward Contracts. Beef producers are able to measure the marketing price for their cattle compared to the national averages.
The Comprehensive Fed Cattle Weekly Report offers the most current information on the current status of fed cattle being harvested. The report is published each Tuesday and includes the previous week’s change in carcass weights and quality grading. The latest report shows carcass weights at 948#, 1# over the prior week, and 22# heavier than last year. The combined steer and heifer weights can easily be influenced when the proportion of steers to heifers in the weekly slaughter changes. Quality grade was up .1% from the previous week at 84.2% .
The Weekly Steer and Heifer Grading Report is indicative of regional supplies of choice and prime cattle and often is determinative of regional differences is live price. The report is also reflective of the current status of fed cattle offerings in each area.
Forward Cattle Contracts: Forward contracts will always bear some relationship to the corresponding futures month closest to the delivery month for the cattle. Basis levels will move up and down as processors want to add to forward contracts or not. The driver in forward purchases of cattle will always be forward sales of beef. Packers will always be willing to take a price risk off the producer’s plate in return for an extra margin.
Formula and Negotiated Grids. The Price and Distribution Report delineates the various selling methods and net results.
The Cattle Contracts Report details the percent of contracts by volume of cattle and by number of contracts for selling cattle. Formula selling that was once the largest marketing method and still is, but is losing ground to negotiated grids where the premiums and discounts are set but the base price is negotiated.
If beef demand should improve heading towards the holidays, the middle meats should provide support for the cutout. Prime cuts are carving out a larger slice of the grocery offerings. Holidays provide an opportunity for many families to spurge on food purchases. Nothing creates more good will at Thanksgiving than finding a prime rib roast along side the turkey.
The Cutout. Box prices were higher to start the week. More emphasis will be focused on the middle meats as we move towards the holidays.
Replacement markets
Replacement prices are finding their way as some buyers put in orders at any price and other buyers pull back and have a wait and see attitude. Futures and cash cattle are both finding their way and both awaiting more information about how the government plans to direct policies directed towards beef production. On the fundamental side, auction market receipts are down as are country movement of cattle — leading to sharp reductions in placements.
It is always popular to be the one to make the accurate call of a market top. The pages written by analysts are full of predictions, that proved false, making calls noting a particular week as the market top. One of these days, some egghead will get it right. He or she will have their stature elevated and with the newly enhanced respect, they will make bolder forecast and some will follow their advice. The truth is no one can accurately make this call because of the dynamics involved in the marketplace. The beauty of a free marketplace is everyone is able to express their opinion and that composite is the only true judge of price direction.
As summer cattle move off pasture to the feedlots, one change from last year is noteworthy. Cattle are heavier. In weight into the nation’s feedyards are 25# heavier than last year lending support to the improvement in grazing performance this past summer. Daily gains are trending .25 to .50# over last year with some daily gains reaching over 2#.
The drought monitor continues to favor herd expansion. Some dryness has developed in the southern plains. Chances are good that the slow rebuilding of the nation’s cattle herd is now morphing into full throttle rebuilding and those forecasting recovery several years away will find it happening sooner rather than later.
Compared to last week: Feeder steers over 800lbs 10.00 higher in a light test, under 800lbs 25.00 higher. Steer calves 20.00-30.00 higher. Feeder heifers and heifer calves 15.00-25.00 higher. Feeder quality plain to average. Calf quality average with a few fancy drafts. Buyers were aggressively bidding on calves. Corporate buyers were still cautious, today. CME futures opened lower but have closed dollars higher. Sunshine and mid 70s are forecasted for the rest of the week. Supply included: 100% Feeder Cattle (55% Steers, 37% Heifers, 8% Bulls). Feeder cattle supply over 600 lbs was 47%
Feeder Cattle Futures. Futures rose with the entire complex as many livestock auctions posted gains in prices.
The lack of liquidity in the feeder contract provides a perfect environment for prices to move too far in either direction. Poor liquidity leads to extreme volatility. Overdone directional price movements frequently require corrections and traders sense the vulnerability of the contract that needs to be cash settled but the contract index needs a redo.
Feeder Cattle Cash Index. The index is tracking the moves in cash prices.
Video and Internet Replacement Cattle Auctions. The movement from traditional private treaty sales to Internet auctions has been slow but steady. Producers have chosen this option as the primary marketing tool for most of the cattle offered in the replacement markets. The market that was once dominated by one firm has seen new competition from multiple trade platforms.
National Weekly Feeder Summary released on Friday of each week tracks the national prices by region for last week.
Grain Futures. Grain prices flattened out. Elevators are holding the basis as harvest progresses in the plains. Corn basis levels in Guymon, Oklahoma are at +$.60 — basis the December contract.
MARKET PSYCHOLOGY
There has been a lot written recently about the change in market psychology. By this, most people mean beef producers now accept the trend line up in cattle prices has been reversed. Producers accept this as fact and are changing their behavior by more readily accepting lower prices. It is factual that people often react emotionally to market moves and those reactions sometimes lack logical analysis.
It is not true that these reactions impede the underlying fundamentals of the marketplace. Emotional responses often set the stage for reenforcing the underlying factors surrounding formation of a market price. The recent crash of cattle futures prices may have triggered some producers to accept sharply lower fed prices, but those lower prices encourage the processors to process more cattle because of enhanced margins. This in turn eats into an already short supply of fed cattle.
While the hedge fund trader sitting in an office in Darian, Connecticut may have liquidated a speculative long position in futures upon hearing President Trumps warning about beef prices, a Swiss commodity trader may see the $15 drop in cattle futures as a opportunistic entry point for a long position in the futures. Neither of these traders have ever seen a feedlot or a fed steer. They could be technical traders, or part of a macro-economic play, or a bot directed order flow.
The marketplace for cattle and beef is a big tent. The futures market fails to be extremely liquid due to the flawed construction of the contract, but it is an open marketplace available to anyone with the necessary margin to make a bet. The physical product is governed by supply/demand principles, and when all of the psychology and emotion are stripped out, the market will always return to the fundamentals.
CATTLE REPORT LIBRARY
Change is a necessity for any sustainable industry and sometimes necessary changes encounter obstacles in the form of stalwarts who refuse change. The Cattle Report has created a library page of opinions pieces published on these pages advocating fundamental and structure changes for the industry.
NOTE TO READERS
Sections of the newsletter are designed with hyperlinks to the appropriate source pages. The hyperlinks are in light blue within the report.
EXPLANATIONS OF BREAKEVEN/CLOSE OUT TABLES
Regional differences in grain and cattle basises create a difficulty in modeling a national composite for current close outs or a proforma forward look at a breakeven. Readers should consider your own area for adjustments to these models. Most calculations are basis relevant prices in Guymon, Oklahoma.
CURRENT BREAKEVEN PROJECTION
The Cattle Report introduces the FEEDER METER. The report estimates profit or loss for currently purchased feeder steers and projects a result 180 days out. The chart is interactive and updated every 15 minutes in real time based on changes in futures markets in grain and cattle. Corn basis information is based on current trade prices adjusted every two weeks. Feeder prices are based on the USDA index price for 800# steers and fed cattle sales are $2 cwt. premium the appropriate futures contract.
CURRENT CLOSE OUT
The Cattle Report estimates current profit or loss on cattle placed on feed 180 days ago. This report generated from industry averages attempts to simulate a typical close out based on the feeder index for 800# steers 180 days ago. The close out assumes grain was purchased at market each month. Selling prices and interest rates are based on prevailing benchmark quoted prices. This chart will change weekly.
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