Chart of the Day - October Live Cattle
The information and opinions expressed below are based on my analysis of price behavior and chart activity
Tuesday, August 26, 2025
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October Live Cattle (Daily)
October Live Cattle closed at 238.200 on Tuesday, adding 1.375 on the day. Friday’s Cattle on Feed
report from the USDA showed 10.922 million head, which I believe is the lowest number in about 6 ½
years. That’s a 2% decline from last year’s report, with both Placements and Marketings declining by 4%
on a year-to-year basis. In my opinion, those numbers are bullish for prices. We did get a bearish push
down to start the week. There was news over the weekend of someone traveling to Central America and
bringing back a New World Screwworm. Not in a petri dish, but in an infected or open wound. Allegedly,
the CDC got involved and there is no threat to either humans or our food chain. But the news was
enough to start the market sharply lower yesterday. By the close, they had rallied some 3.300 off of the
lows, before setting new contract highs today.
By looking at the chart above, you may notice a few things. The 5- and 10-day moving averages
(blue/red, 236.495/233.190, respectively) are below the market and are pointing higher, offering
potential support. The blue trendline, drawn off of the Jan-June highs, is also offering a potential
support level, near 228.000 or so. That trendline was resistance, but since breaking higher in late July,
the trendline has now become a support level. The 50-, 100- and 200- day averages are well below the
market. The 50-day (green) is the closest, near 221.18. If we were to trade back there, that average may
prove to be key support, much like it did in Feb, April and June. Stochastics (bottom sub-graph) is in
overbought territory, and has been since August 15th. You may agree that this market has preferred to
stay overbought, going back to the beginning of this chart in March. It has maintained that condition
throughout most of July.
The one bearish caveat that I have to share is this: the last trading day of the month is Friday. That’s also
the day before a 3-day weekend. If you recall, on the last day of July, this October contract shed 6.575 in
value as traders booked profits. We’re currently up 15.050 in August. July ended the month up 12.975,
after the 6.575 selloff. If Wednesday and Thursday result in nice gains, don’t be surprised by a profit
taking drop on Friday.
Make no mistake, though. Technically and fundamentally, the Cattle markets are bullish and showing no
real signs of slowing.
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October Live Cattle (Weekly)
So far for this week, the October Live Cattle are up 0.325. From low to high, it’s had a decent range in just 2 days of 5.000. That’s a bit shy of the average weekly range of 9.00 that the Cattle market has posted over the last 4 weeks. But there’s still 3 days left in the week. If we assume that the market has already made it’s low for the week, a similar 9.00 range this week would project to a high of 242.525. But assumptions and projections are rarely accurate, so take that with a grain of salt.
I’m still bullish the Cattle market, as I’ve not yet seen anything to change my mind. We have less cattle and more people to feed. Retail demand remains strong, no matter how many newswire articles there are about high beef prices. Boxed Beef prices continue to rise this week, indicating to me that the retailer demand remains strong. At the current moment, demand destruction is the only bearish outlier, in my opinion. And we’ve not seen anything approaching that yet.
On the weekly chart above, I’ve added a simple Fibonacci retracement from the March lows to this week’s high. I picked that low because it’s the most significant and recent low, and this week’s high because….it’s the high. I put this on the chart to illustrate how far the market could come back down (not that I expect it to) and STILL be in a bullish trend. The 5-and 10-week moving averages (blue/red, 231.275/223.978, respectively) have been in a bullish configuration since the 2nd week of March. A 23% retracement pegs to about 226.250. That doesn’t even get prices down to the 10-week average, the uptrend would still be intact. Even a “textbook” 38% move pegs close to 218.675. That would break through the 10-week average, but still not change the trend.
Seasonal Data can be found here, if you’re interested. Given the supply/demand equation here in the Cattle markets, I don’t think the seasonal patterns or tendencies matter very much.
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Jefferson Fosse Walsh Trading
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