By Trey Freeman, Ever.Ag

Cattle futures have seemingly searched for unfriendly news recently. Demand needs to hold tight to prevent any price declines. Fed cattle cash trade occurred at $180.00-$182.00/cwt. across the Plains, about steady with last week. In the north, trade was established at $288.00-$292.00/cwt. dressed, steady to $2.00 lower than the previous week.

Both feeders and fats tested the highs in the last three weeks trading range. Feeder cattle futures are turning friendly on the charts. A close over $240.00/cwt. in the October contract opens the door to $243.45. Live cattle continue to struggle, but October did manage two consecutive closes over the 10-day moving averages to finish the week. Cash fed cattle will likely need steady to higher prices this week before October can test $180.00/cwt. again.

However, a significant downturn in 90s trim could be a strong indication that consumers are opting away from ground beef, and perhaps beef as whole, and turning to cheaper meats at the grocery store. Analysts are closely monitoring 90 trim prices as it has been a superstar performer this year, rising from $255.00/cwt in January before trading sideways between $370.00 and $380.00/cwt. for the last three months. This is leading many to believe that price action in 90s trim is the best litmus test to gauging consumer demand toward beef. Seasonally, 90s trim tends to trade lower into the end of the year. Therefore, a lower move is expected. But a sharp move lower would set off red flags.

Overall, it is hard to justify a continued advance near $190.00/cwt. in live cattle futures and $250.00/cwt in feeder cattle futures heading into the end of the year. It seems unlikely that buyers are willing to step in and go long into an upcoming election, especially amid financial uncertainty and lingering inflation.

Cattle prices in 2025, however, are a greater unknown. Supplies are still historically tight. Shifts in the greater American economy could spur strength in beef demand. It is hard to tell what is to come further out. Persisting volatility in the futures markets is likely a better bet than trying to guess prices. 

The risk of loss trading commodity futures and options can be substantial.  Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made.  The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.