May 23, 2026
MARKETS
The futures market is nervous — looking for an excuse to tank and there may be real excuses. The crash in futures at week’s end unnerved sellers and pared earlier sales this week of $264-$265 live to mostly $260 by Friday with a few in the north at $258. Dressed sales fell from early week $415 to $408-$410. The excuses ranged from reduced Memorial day features to soft box prices indicating failing consumer demand.
USDA MAY 1 CATTLE ON FEED
On Feed (May 1, 2026): 11.6 million head, +2%
Placements in April: 1.70 million head, +6%
Marketings in April: 1.64 million head, –10%
Other disappearance in April: 52,000 head, +4%
Published pre-release guesses on this past month’s placements were all higher but the report was probably accurate in reporting larger than expected placements. The bearish report influenced futures prices before the release instead of after the release. Insider trading should always be investigated by the CFTC. A 3% miss in placements does not set the stage for month on month increases moving forward. Many of the placements off winter grain fields moved in April rather than May this year.
This past week’s slaughter was 528,000 head — 7,000 under the previous week, and a whopping 48,000 under last year. The struggle at the beef plants with negative margins is creating a negative backdrop for slaughter volumes in the upcoming weeks. Next week the slaughter could be under 450,000 with the holiday Monday. They are finding a little relief from the cash markets for fed cattle this week with a $5-7 fall from last week’s highs. Supplies of fed cattle will continue short. Packers used their leverage of next week’s shortened slaughter week to pressure the cash trade but they will be purchasing for a full week next week.
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 955#, 2# higher than the prior week, and 42# 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 .8% from the previous week at 89.4%. The quality grade should begin a slow decline lasting into summer, but with out weights at record highs, grading will remain high historically.
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.
The overheated replacement market will slow the forward contracting of purchases this year. The discounted price in the deferred futures contracts will not encourage cattle owners to forward price cattle at a loss. Favorable forward basis levels can always incentivize sellers to enter into basis contracts to be priced later.
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.
Beef demand will now move into summer periods starting with Memorial day, Fathers day and the 4th of July — all periods for beef to play a prominent role. The high price of beef is always a risk for damage to demand and the continuing interest of the administration to lower beef prices is a constant threat. Beef must suffer a loss of marketshare, not because of price, but simply because we are producing less beef. With the grind dominating much of beef consumption, imports will continue to rise.
USDA Prime cuts are carving out a larger slice of the grocery offerings. Many retailers are struggling to market these cuts and often feature discounts to encourage consumption. This is a benefit for consumers who find bargains on premium cuts. Heavy carcasses also are changing the processing specifications for some cuts. Many of the rib cuts are now cutting off the lip to make the ribeye steaks smaller.
The Cutout. Box prices softened late week leaving some worried about consumer demand during the peak beef eating season. Choice re-established a premium following an extended period when select was premium to choice. Some expectations are for improvement in the middle meats following Memorial day and more cookout interest in steaks for Father’s day and the 4th of July. Slaughter volumes will continue to be dictated by processing margins. The normal seasonal pattern of increasing spreads in the quality grades may not develop this year with the abundance of high grading cattle.
The meat counters in many grocery stores are full of what many experienced shopped would call mispriced cuts. Prime cuts are par with choice and Certified Angus. Special store features are discounting prime cuts. Branded and all natural offerings are disappearing.
Replacement markets
May often brings spring rains to enable pasture conditions in the plains to accommodate summer grazing programs. Many cattle moved early off winter grain fields in April and the movement as seen in the monthly COF report. Movement and placements are slowing in May. Placement of cattle on feed continues to show heavier placement weights on beef feeder cattle following the same pattern seen in the nation’s feedyards for finished cattle. Many of the reports fail to separate beef and beef on dairy placements. Beef on dairy crosses are placed at lighter weights than beef yearlings. USDA has failed to update industry changes in many ways, but noting the placement changes featuring dairy beef crosses is also creating gaps in understanding the rebuilding of the nation’s cow herd because of placement of dairy heifers is camouflaging the decline in placement of beef heifers.
Feeder futures for the deferred contracts are selling for large discounts to the current cash markets. The cash index is $370+ with summer feeder futures $25-$30 back. Feedlots searching for viable purchase levels may not be heartened by the lower prices for late year replacement cattle because extending those discounted cost to finish weights yields an undesirable negative result of over $150/head.
The drought monitor is a map showing regions of the country under stress for lack of normal rainfall. The map is compiled over a period of time and the current status of many regions is often misrepresented by the latest map because of updated information. The latest map shows deeper stress in many areas but since publishing the map, rains have fallen in many of the stressed areas. Rains have brought some relief to the southeast and parts of Colorado and Kansas. The increase in storm clouds has also increased wildfire risk in many dry areas.
Compared to last week; Feeder steers and heifers mostly steady. Demand moderate to good for feeder cattle despite lower cattle futures. Corn prices pushed higher as exports are expected to increase, thus causing feeder futures to move lower. Slaughter cattle trade pushed thru record highs once again last week with good movement. Weaned steer and heifer calves 10.00-20.00 lower in a light test and on lesser
quality. Un-weaned calves sold sharply lower. Hot humid day today followed by 60’s tomorrow has negative effects on un-weaned and short weaned calves. Demand moderate for calves. Some farmers are busy in the field cutting wheat. Quality mostly average. Feeder cattle in medium to fleshy conditions, few thin. High winds and warm temperatures the last 4 days has only intensified drought conditions in Western Oklahoma. There are some rain chances for the rest of the week. Supply included: 100% Feeder Cattle (57% Steers, 39% Heifers, 4% Bulls). Feeder cattle supply over 600 lbs was 82%
Compared to last week: Steer calves over 550lbs unevenly steady, under 550lbs 10.00-15.00 lower. Heifer calves 3.00-9.00 lower. Demand moderate. One consignor did bring a set of fancy calves in large drafts and those cattle sold better than the top end for last week. Buyers continue to give it all for front end cattle, but the overall quality was not there today. A cold front swept through this morning, dropping high temperatures into the low 60s and bringing some rainfall, though the heavier amounts were mostly confined to Southeastern Oklahoma. Supply included: 100% Feeder Cattle (35% Steers, 58% Heifers, 7% Bulls). Feeder cattle supply over 600 lbs was 24%
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. Corn prices firmed at week’s end but the news was the basis that has continued to move higher. China’s public position on grain purchases has been murky. Grain basis levels are moving higher driven by increasing transportation costs. Corn basis levels in Guymon, Oklahoma are at +$.90 — basis the July contract.
BREAKING PRICE PATTERNS
Analysts regularly display price trending graphs that help us understand both seasonal and historic pricing patterns. Those patterns typically set the stage for future price expectations and drive many spreads on futures contract months. The past couple of years have thrown cold water on many of those patterns as changing market forces transform pricing models.
An examination of typical yearly high prices for fed cattle would reveal April to be the most common month for highs for fed cattle prices. The past three years have seen June and beyond taking out the April highs. During the past three years these price movements have been driven more by tight supplies, market news, and administration policy changes than seasonal and fundamental pricing patterns.
Quality grading has frequently dictated the grid premiums from winter to summer, but currently quality grade is taking a back seat to other drivers of value such as yield grade or carcass yield. The normal abundance of choice cattle in the first quarter of the year is now extending into the summer with many days in May where select grades are premium to choice. Many of the premiums earned by prime grades are now lost in an abundance of USDA prime that has reached 15% of all fed cattle.
The seasonal and historic changes to beef pricing extends to the grocery meat counter where most of the nation’s beef is sold. Because of high beef prices, more of beef is sold as hamburger so consumers are not offended by sticker shock. A $6/pound pack of hamburger sounds better than a $25/pound steak. This has eliminated many end meat cuts like roasts and converted them to the grind. Fresh frozen beef cuts have attempted in the past couple years to anticipate high demand during the holiday season from Thanksgiving to New Years. High dollar cuts such as steaks and prime rib are fresh frozen, an innovative process, and held from low demand periods of the year to high demand holiday periods. Fresh frozen now may create too much of the quality product for the target period and fail to produce the intended premiums.
MANDATORY PRICE REPORTING
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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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