Looking to the Futures

Both Live Cattle futures and Feeder Cattle futures settled higher on Tuesday. February Live Cattle (/LEG26) rose 0.065%, settling at 230.725 cents. January Feeder Cattle (/GFF26) rose nearly 1.0% to 343.32 cents. Since bottoming, November 25th, Feeder Cattle futures tested the 300-cent mark and touched a low of 299.52 cents per pound, and Live Cattle dropped to 204.55 cents. Cattle futures prices have made a strong reversal since the November 25th lows. Over the past 15 trading days, both products have recovered approximately 11%, heading into the holidays.

Trading volume around the holidays can gift the market with higher than usual volatility. Reduced volume makes prices more sensitive to news events. Market closures may create overnight gaps when markets reopen, while year-end repositioning may prompt outflows. Other factors that may have more of a direct impact on Cattle futures, packers might use the period around the holidays to secure inventory through the cash markets, further influencing cattle prices.

Cash markets started the week quietly, with negotiated cash trade was inactive in all regions with the last established market for live cattle in Kansas brought a price of 230, Nebraska live cattle brought 225-230 and dressed 355, and Western Cornbelt brought 225-230 for live and 350-355 for dressed.

President Donald Trump and U.S. Secretary of Agriculture Brooke L. Rollins on December 8th announced the U.S. Department of Agriculture (USDA) will make $12 billion available in one time bridge payments to American farmers. Of this, $11 billion will be used for the Farmer Bridge Assistance (FBA) program. The FBA program will aim to help address market disruptions, elevated input costs, persistent inflation, and market losses from foreign competitors engaging in unfair trade practices that impede exports. Farmers who qualify for the FBA Program can expect payments to be released by February 28, 2026. Eligible farmers should ensure their 2025 acreage reporting is factual and accurate by 5pm ET on December 19, 2025, according to the USDA's press release from December 8th.

Last week Reuters reported, JBS USA Holdings, a meat processing subsidiary of Brazilian multinational JBS S.A. will permanently close a Los Angeles facility that prepares beef for sale at U.S grocery stores citing, "tight cattle supplies have raised costs for the meat packers." The facility will officially close on February 2, 2026, eliminating 374 jobs according to a notice from the state's Employment Development Department. This follows Tyson's decision to end operations at a Nebraska beef plant and reduce operations in Amarillo, Texas.

Tomorrow's upcoming Consumer Price Index (CPI) will give insight into changes in beef prices as consumers continue to deal at the grocery store with increasing prices of beef. Octobers CPI report showed the beef and veal category up 14.7%, compared to overall food increasing 3.1% from September 2024 to September 2025. Farmers, traders, and consumers will continue to weigh the impact of tightening supply in the cattle markets which have reached the smallest national herd since 1951. As producers lock in higher prices for their cattle. They may retain more heifers for breeding. Over time, the supply will gradually recover, until prices retreat, and herd sizes tighten again.

Other factors to monitor as we close the door on another year and look ahead to 2026. Beef exports saw declines, especially in China where according to the USDA's, Livestock, Dairy, and Poultry Outlook report from Monday showed a drop in exports of nearly 95% year over year due to expired registrations. Imports were down 2% according to the report as well. Mainly on the back of reduced imports from Brazil. Futures expectations indicate increased imports in 2026 according to the report citing, lower tariffs, though global beef supplies are projected to tighten, which may limit U.S. import growth and sustain firm futures prices.
 

Examining the one-day, three-month chart for February Live cattle futures (/LEG26), we see that prices have recovered 11% from the low of 204.55 on November 25th. The futures price has consolidated above the 50-day simple moving average (SMA). The 9-day SMA is closely aligned with the 50-day SMA. The 50-day SMA shows a slight downward trend at 228.154 cents while the 9-day SMA, which is aiming to breach the 50-day SMA, displays a stronger upward trend at 228.056.

On December 10th, the 9-day SMA crossed over the 21-day exponential moving average (EMA). The 21-day EMA exhibits a moderate upward trend but remains about 3 points below the 50-day SMA. Meanwhile, the Relative Strength Index (RSI) has flattened over the past week but is still above the neutral mark at 60.838, indicating an advantage for buyers over sellers. The RSI last reached oversold levels on November 24th and 25th, when futures prices hit the low of 204.55. Prior to that, the RSI was last in the overbought territory from October 10th to 16th, during which time futures prices reached a new high of 248.30.
 

9-Day SMA                    228.056

21-Day SMA                  224.587

50-Day SMA                  228.153

14-Day RSI                     60.8379

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