Wednesday Closing Livestock Market Update - Weak Fundamental Support Keeps Contracts Trading Lower

GENERAL COMMENTS:

It was another lackadaisical day for the livestock complex as traders had no real other viable option but to let the contracts drift lower as fundamental support remains sparse. No cash cattle trade developed throughout the day. December corn is down 2 cents per bushel and December soybean meal is up $1.30. The Dow Jones Industrial Average is down 48.62 points and the NASDAQ is down 511.51 points.

LIVE CATTLE:

Another day came and went and still traders haven't seen the support they desire to see surface yet in the fed cash cattle market. More than anything traders are merely holding the live cattle contracts steady, trying to wait and see if feedlot managers are going to be able to hold this week's market steady. Asking prices are noted at $230 in Texas, but otherwise the market has been extremely quiet with no other developments having been made just yet. October live cattle closed $0.72 lower at $223.90, December live cattle closed $1.25 lower at $225.12 and February live cattle closed $1.15 lower at $227.42. 

Wednesday's slaughter is estimated at 110,000 head -- 1,000 head less than a week ago and 10,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.35 ($376.50) and select up $4.80 ($358.47) with a movement of 107 loads (60.28 loads of choice, 13.15 loads of select, 7.68 loads of trim and 25.48 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. It's going to be interesting to see where prices land this week because on one hand you could argue that prices could trade higher as packers have been more aggressive in recent weeks and do slightly seem short bought. But on the other hand because they have been aggressive they sit on more inventory than they did just a week ago which could alleviate some of their need to give aggressively into the market.

FEEDER CATTLE:

And as to be expected, the feeder cattle contracts ended the day lower without seeing support arise from either the fed cash cattle market or the live cattle contracts. October feeders closed $2.12 lower at $340.95, November feeders closed $2.57 lower at $338.45 and January feeders closed $2.25 lower at $333.60. At Beaver Livestock Auction in Beaver, Oklahoma compared to last week feeder steers over 700 pounds sold steady to $2.00 higher, steers weighing 600 to 700 pounds sold $20.00 to $25.00 higher. Steer calves traded $2.00 to $4.00 stronger and feeder heifers and heifer calves sold steady to $5.00 stronger. Feeder cattle supply over 600 pounds was 71%. The CME feeder cattle index 10/13/2026: down $0.05, $341.42.

LEAN HOGS:

The lean hog complex again closed lower as traders aren't pleased nor are comfortable with the level of support in which they've seen recently in from consumers in regard to pork demand. And until some fundamental support arises, this lower/weaker trend will likely continue. December lean hogs closed $1.95 lower at $66.07, February lean hogs closed $1.75 lower at $67.85 and April lean hogs closed $1.10 lower at $73.05. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.12 with a weighted average price of $69.14 on 3,711 head. Pork cutouts totaled 280.22 load with 243.38 loads of pork cuts and 36.84 loads of trim. Pork cutout values: down $1.23, $79.45. Wednesday's slaughter is estimated at 497,000 head -- 2,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index 10/12/2026: down $0.57, $75.94.

THURSDAY'S HOG CALL: Lower. Packers already bought aggressively one day this week and likely secured the vast majority of their needs for the week. 

Record highs fade, but cattle fundamentals remain bullish

Cattle markets have retreated from the record highs reached earlier this year, but underlying fundamentals remain supportive. The pullback reflects a market moving off exceptional highs rather than a meaningful shift in outlook.

Feedlot inventories totaled 11.1 million head on Aug. 1, up 2% from a year earlier, as longer feeding periods and the gradual return of Mexican feeder cattle imports helped offset lower placements earlier in the year. Even so, beef production continues to run below previous expectations as slaughter rates remain historically low, prompting USDA to reduce its 2026 beef production forecast.

Cattle and beef imports are providing some relief to tight supplies, though uncertainty remains regarding their impact on the broader market. The reopening of the Douglas, Arizona, and Santa Teresa, New Mexico, crossings has improved confidence in feeder cattle flows, with more than 18,000 head entering the U.S. during the past six weeks. The crossings were previously closed due to concerns surrounding New World screwworm, a flesh-eating parasite first detected in the U.S. on June 3. Since then, cases have slowed markedly, declining from 31 detections in the first month to just four over the past month. All cases have remained confined to southern New Mexico and Texas. Although the situation has improved, the industry continues to monitor the pest closely, as a broader outbreak would pose a significant threat to U.S. cattle production.

Markets have also focused on the expanded 300,000-metric-ton tariff-rate quota for imported lean beef trimmings. Beginning Sept. 1, the first 100,000 metric tons became eligible to enter the U.S. at a reduced tariff rate, with the goal of increasing supplies used in ground beef production and easing retail beef prices. The initial tranche alone exceeds the 70,000-80,000 metric tons of lean beef trimmings typically imported. However, the market impact remains difficult to isolate. While cattle prices have eased from the record highs reached in May, it remains difficult to determine how much of the decline can be attributed to increased imports versus typical seasonal pressures. The fall calf run traditionally weighs on prices as large numbers of spring-born calves enter the market, although many contracted calves continue to command prices above $4.00 per cwt. Retail beef prices have shown little sign of meaningful relief. The market impact of expanded lean beef imports remains unclear and continues to be closely monitored by producers and industry analysts.

Demand remains one of the market's strongest pillars. Consumers have continued purchasing beef despite elevated retail prices, while historically low beef cow numbers and slow herd rebuilding continue to underpin the longer-term outlook. Competition from expanding pork and poultry production, along with growing beef imports, may create headwinds, but the broader market story remains unchanged: cattle supplies are tight, demand is resilient, and fundamentals continue to support the sector despite recent price consolidation.

Profitability

Cattle feeders: Slightly profitable - Bearish 12-month outlook
Cow-calf producers: Very profitable - Bearish 12-month outlook

Strong fed cattle prices continue to offset elevated feeder cattle costs, although narrowing margins and softer cattle prices have reduced profitability from earlier highs. 

The outlook has turned more bearish over the next 12 months as calf prices have retreated from record highs and concerns grow over increased beef imports, higher feed costs, and growing uncertainty surrounding cattle prices and producer margins. 

Wednesday Midday Livestock Market Summary - Without Stronger Fundamental Support, Contracts Trade Lower

GENERAL COMMENTS:

Without stronger support from the market's fundamentals, all of the livestock contracts are trading lower into Wednesday's noon hour. No cash cattle trade has not developed this week, yet. December corn is down 2 1/2 cents per bushel and December soybean meal is down $4.30. The Dow Jones Industrial Average is down 184.01 points and the NASDAQ is down 439.22 points.

LIVE CATTLE:

And again without any trade having developed yet in the fed cash cattle market -- traders are merely allowing the live cattle contracts to chop sideways through Wednesday's trade. It is supportive from a fundamental sense that boxed beef prices are higher, but traders are really interested in seeing what's going to become of this week's cash market. October live cattle are down $0.52 at $224.10, December live cattle are down $1.02 at $225.32 and February live cattle are down $0.97 at $227.60. No cash cattle trade has developed yet, but asking prices are noted at $230 in Texas. It's likely that trade will be delayed for at least another day, if not two.

Boxed beef prices are higher: choice up $0.43 ($375.58) and select up $5.34 ($359.01) with a movement of 65 loads (28.06 loads of choice, 8.68 loads of select, 6.71 loads of trim and 21.95 loads of ground beef).

FEEDER CATTLE:

And without grand support from the live cattle complex, again Wednesday the feeder cattle contracts are trailing lower into the day's afternoon. October feeders are down $2.10 at $340.97, November feeders are down $2.27 at $338.75 and January feeders are down $1.65 at $334.22. And until support improves from either the live cattle contracts or the fed cash cattle market -- this steady/sideways chop will likely remain the feeder cattle market's trend.

LEAN HOGS:

Although midday pork cutout values are up a tick, traders simply aren't confident in the market's demand scenario which is why the contracts are trading lower yet again. October lean hogs are down $0.12 at $75.47, December lean hogs are down $1.32 at $66.70 and February lean hogs are down $1.35 at $68.25. And to be specific -- the spot December lean hog contract is trading at a contract low today. The projected lean hog index for 10/13/2026 is down $0.19 at $75.75 and the actual index for 10/12/2026 is down $0.57 at $75.94. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.31 with a weighted average price of $69.05, ranging from $64.00 to $78.00 on 3,248 head and a five-day rolling average of $70.96. Pork cutouts total 175.28 loads with 151.66 loads of pork cuts and 23.62 loads of trim. Pork cutout values: up $0.59, $81.27. 

Wednesday Morning Livestock Market Update - Feedlots Versus Packers

GENERAL COMMENTS:

Cattle markets were quiet Tuesday, waiting to see what cash trade does for the week. Currently, slaughter is running about 4,000 head above last week at this time at 216,000. Nebraska cash is trading $218-$223 live while Iowa and Minnesota are slightly lower at $218-$221. Cattle are available and ready to move in the North; however, getting bids has been a struggle for producers. Cutout values fell slightly for beef with choice down $0.41 at $375.15 and select was down $0.46 at $353.67.

Hog futures traded lower Tuesday, facing an uphill battle when all fundamental news points toward lower prices. Even though the Commitment of Traders report indicated that funds bought back some of their large short positions, the fact is that the big money is still betting at near-record levels against hog prices moving higher. Pork cutouts fell again Tuesday, down $2.29.

	BULL SIDE		BEAR SIDE
1)	Packer margins are estimated at +156.36/hd, the eighth week in a row of positive margins.	1)	Packers in the North are holding out on purchasing cattle while there is plenty of inventory ready to move as we approach the end of the October contract.
2)	Technicals for both live cattle and feeder cattle are strong as the market isn't shying away from hanging out near recent highs.	2)	Beef is projected to have higher carryout in 2027.
3)	Managed money has begun lifting some of their record net-short positions in the hog market, reducing pressure on futures market.	3)	Middle to lower income consumers are moving away from pork and increasing chicken consumption.
4)	Market hog numbers are down 2% while breeding numbers are down 1% year-over-year.	4)	Pork is projected to have higher carryout in both 2026 and 2027.