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"We can't predict the price we can only protect it"

This is your one stop to watch the feeder cattle market.

Basis looks a couple different ways

​CME Feeder Cattle Index $296.10 OCTOBER 2025 CME Feeder Cattle Futures $290.60=

+$5.50/CWT Basis (at the end of a month they cash meets the futures)

🚨Here is a new way to look at the numbers
CME Feeder Cattle Index High of all time April 30 2025 $296.10

OCTOBER 25 Feeder cattle futures $290.60

+$5.50/CWT basis spread to the all time high.🚨

The index is going to keep strong. We are nearing video sales and country buying. I know everyone is holding their breath. I think this index will only strengthen possibly until July. What a blessing we are in new ground for everyone. I will be traveling the next few days out of state may be harder to get ahold of me.

Regional Feeder Cattle Prices
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

Cow-calf production is widespread across the country. According to the Cattle report for January 1, 2025, the five largest beef cow states have 39.1 percent of the total beef cow herd but a total of 18 states have at least 2 percent of the total beef cow inventory. The majority of calves move to the middle of the country as stocker or feeder cattle and are assembled into larger groups, culminating in relatively concentrated feedlots. The top five cattle feeding states have 71.9 percent of total cattle on feed. Most feeder cattle change hands at least once to as many as four or five times by the time they are finished in the feedlot. Feeder cattle prices are the thread that connects and coordinates production and marketing between sectors that frequently have no contact beyond market transactions.

Feeder cattle prices around the country reflect local supply and demand conditions and the economic process of moving cattle to the middle of the country where feedlot production is concentrated. Figure 1 shows the average price of 500-pound, M/L, No. 1 steers in selected states for the first three weeks of April. The map illustrates the typically pattern of prices across the U.S. The prices range from a high of $410.01/cwt. in Nebraska to a low of $362.66/cwt. in Mississippi, a spread of 11.5 percent from high to low. It is generally true that the highest feeder cattle prices will be in Nebraska with prices declining in all directions away from Nebraska.

The pattern for bigger feeder cattle is similar. Figure 2 shows the average prices of 800-pound steers in April. Prices range from the Nebraska high of $315.05/cwt, to the Mississippi low of $256.81/cwt. The spread from high to low is 18.5 percent. Most of the regional price differences are explained by the transportation costs to cattle feeding areas with the discounts bigger for heavy feeder cattle, which cost more (on a per head basis) to ship.
Feeder cattle markets reflect the economic principle of the “law of one price”. This concept states that prices are equivalent when adjusted for differences in time, place and form. Feeder cattle prices differ according to location, weight and other factors but reflect an underlying equilibrium due to arbitrage that occurs in feeder cattle markets between cow-calf and feedlot. The stocker industry plays a critical role in this market arbitrage, providing time, place and form functions and production value for growing cattle.

🚨 PLEASE READ CHRIS SWIFT 🚨
Mid Day Cattle Comment (Potential reversal pattern developing)
Inbox


Chris Swift
8:58 AM (5 hours ago)
to Chris

May 1, 2025

Live Cattle:
I watched the first 100 days of Trump administration twice now and believe that his agenda will be 180 degrees from the massive over spending of the Biden administration. This leads me to continue to believe that factors outside of cattle/beef supplies may or may not have a significant impact on price going forward for which consumers will have to make further choices between what they eat and what bills get paid. In my opinion alone, all that is transpiring in the production portion of the cattle industry is the garnering of market share, causing a historical event of record cattle and beef prices. Once, or if, the market share is garnered, or found to be no longer the objective, I will anticipate a bear market for which there will be fewer participants to provide a bid for inventory. Lest you forget, there is too much production capacity for the number of animals available. Find more animals to tend to, or reduce the capacity.

Feeder Cattle:
I cannot recall which publication I saw this in, but believe I saw where heifer slaughter was reduced in a manner suggesting some expansion may start to take place. While many believe that when this takes place, it will cause even further shortages of slaughter cattle and send prices closer to the moon than ever before. However, if you go back a year, you will find that I wrote about a future time frame in which consumer demand had been stifled by high beef prices and agendas would create more beef that would help to offset the reduction of heifers when expansion finally started. That future time frame may well be at present. Stealing the media's favorite word, I believe these are "unprecedented" times in the cattle/beef industry for which great market share is being sought in a very small commodity market. With a plethora of derivatives available to manage the inherent risk associated with commodity production, consider how much risk you are assuming, how much you wish someone else to help you assume, and how much are you willing to pay someone for that.

If it holds, today's gap higher opening and lower close would produce a very visible outside reversal pattern. I recommend buying the August $285.00 feeder cattle puts for a speculative position. This is a sales solicitation. I recommend for every new load you have acquired this spring to lay off risk with an at the money put and sell a $10.00 to $14.00 out of the money call in the month closet to physical marketing time frame. This is a sales solicitation. The stretch to $300.00 on the feeder cattle index won't be difficult to make if market share is so desired. At current basis levels, the short call strikes should be into the $300's, allowing you to capture a predetermined portion if it were to materialize. If not, you have continued to market at higher levels for which is believed you will have produced the highest marketing averages for the year.