Chicago Mercantile Exchange cattle futures staged a dramatic turnaround on Friday, with CME November feeder cattle surging 7.075 cents, or 2.1%, to 341.950 cents per pound after hitting a three-month high. According to Reuters, the rally was triggered by the US Department of Agriculture's unexpected decision to raise its 2026 US corn harvest outlook, sending corn futures tumbling by as much as their daily 30-cent-per-bushel trading limit. December live cattle also gained 3.500 cents, or 1.6%, to 227.050 cents per pound after breaking through overhead technical resistance at its 100-day moving average. Ross Baldwin, broker and market analyst at John Stewart and Associates, noted that "The feeder cattle market is loving this. You get out to the deferred months, and it's as bullish as you can imagine."
Despite the cattle futures rally, wholesale beef prices continued their decline on Friday, with the USDA quoting the choice boxed beef cutout at $373.35 per hundredweight, down $1.50 from the previous day. Select cuts fell $2.12 to $352.09 per cwt, marking a significant decline from earlier session strength. However, beef packer margins also narrowed to $83.75 per head on Thursday, down from $126.45 a week ago, according to livestock marketing advisory service HedgersEdge. The combination of lower beef prices and improved feed costs has created a more favorable environment for cattle producers, though the market remains underpinned by generally strong consumer demand for beef.
The cattle futures rally was supported by significant technical developments, with November feeder cattle holding underlying technical chart support at its 100-day moving average while hitting overhead resistance at its 200-day average. December live cattle also benefited from technical buying that gave the market additional lift after breaking through overhead technical resistance at its 100-day moving average. As reported by Reuters, the technical breakthroughs provided the momentum needed to overcome earlier profit-taking pressure that had driven prices lower in recent sessions. The combination of improved feed cost outlook and technical support has created a more bullish environment for cattle futures.
An increase in imported cattle supplies from Mexico in recent weeks continues to weigh on the feeder cattle market, adding to the downward pressure on futures prices despite the current rally. According to Reuters, this supply increase has created additional competition in the cattle market and contributed to the profit-taking sentiment that had previously pressured prices. The combination of slow cash market development and increased import competition has created a challenging environment for cattle futures, though the current corn price plunge has provided temporary relief from these structural headwinds.
CME lean hog futures ended lower on Friday for the fourth straight session, with most-active December hogs falling to a contract low of 67.325 cents per pound before settling 0.775 cent lower at 67.825 cents per pound. As reported by Reuters, the decline was anchored by weak cash hog and pork prices, extending the retreat from previous session gains. This contrasting performance in hog futures compared to the cattle market demonstrates selective buying interest across different livestock sectors, with hog futures facing additional pressure from weakening cash market conditions and ongoing supply concerns.
