Cattle Bouncing on Monday

Live cattle futures gained $1.40–$1.70 midday with front-month contracts trading around $220–$221 while feeder cattle futures rose $1.35–$4.65 and the CME Feeder Cattle Index ticked up $1.31 to $343.73; quoted futures levels include Dec 25 LC $220.55 and Feb/Apr 26 LC near $221. Cash trade last week was mostly $225–$227 (a few $228 in the South; late Northern sales $218–$222), USDA federally inspected slaughter totaled 576,000 (up 16,000 week/week, down ~32,810 year/year), and the Oklahoma City feeder auction has an estimated 7,000 head with early good demand. USDA boxed-beef was mixed—Choice $369.99 (‑$0.74), Select $354.97 (+$0.73), narrowing the Choice/Select spread to $15.02—and the White House trimmed tariffs on several food imports including some beef (Brazil still faces a 40% tariff), a policy move that may influence import competition and domestic price dynamics.

Analysis

Live cattle futures strengthened midday, rising $1.40 to $1.70 with front-month contracts around $220–221 (Dec 25 LC $220.55 up $1.40, Feb $221.00 up $1.475, Apr $221.20 up $1.625); feeder cattle futures also advanced $1.35 to $4.65 with quoted levels including Nov 25 Feeder $340.05 (+$1.375) and Jan 26 Feeder $325.20 (+$4.65), while the CME Feeder Cattle Index ticked up $1.31 to $343.73 on Nov. 13.

Cash-market prints last week clustered at $225–227 nationally with a few $228 in the South and late Northern sales at $218–222, supporting the nearby futures rally even as USDA federally inspected slaughter totaled 576,000 head (up 16,000 week/week, down 32,810 year/year). The weekly OKC feeder auction is estimated at 7,000 head with early demand described as good, indicating feedlot-side demand remains constructive near term.

USDA boxed beef showed mixed signals—Choice $369.99 (-$0.74) and Select $354.97 (+$0.73) narrowing the Choice/Select spread to $15.02—while policy news that the White House cut tariffs on several food imports including some beef (Brazil retains a 40% tariff) introduces potential longer-run import competition. Market-sentiment signals are mildly positive with modest market-impact scores, so the price backdrop is supportive near term but sensitive to weekly slaughter, boxed-beef dynamics and tariff developments.

Key Decisions for Investors

• Consider modest tactical long exposure to near-dated live cattle futures or call spreads to capture the current $1.40–$1.70 upside while keeping position sizes conservative given mixed demand signals
• Monitor weekly USDA slaughter figures and OKC auction receipts closely and be prepared to trim exposure if slaughter trends rise materially or cash trades drift toward recent Northern lows of $218–222
• Use basis or short-dated futures hedges to protect cash positions given the narrowing Choice/Select spread to $15.02 and mixed boxed-beef prices that may signal softer premium demand
• Watch implementation details of the White House tariff changes and import flows (noting Brazil still faces a 40% tariff) and add protective hedges or reduce gross longs if import competition increases