Looking to the Futures
Live Cattle Futures Rise 1.25% Wednesday Afternoon
Live cattle futures (/LEQ26) are trading at 234.10 points, up 2.15 on the day. Cattle futures have rebounded from a low of 221.7 on July 23rd. This comes after the USDA announced a phased reopening of southern ports for livestock trade.
On July 24th, the United States Department of Agriculture announced that a phased reopening of southern cattle ports would begin on August 24th. Initially Douglas, AZ is set to be the first port open to trade. Subsequent openings would include the New Mexico ports of Santa Teresa and Columbus. Every animal entering the United States will be fully inspected by the USDA to ensure it is free of any signs of New World screwworm (NWS).
The United States suspended live cattle imports from Mexico in May of 2025 to prevent the spread of NWS to cattle in the US. Since then, only 44 domestic cases have been reported and just four cases remain active.
U.S. Secretary of Agriculture Brooke L. Rollins announced the USDA's commitment to invest $25 million toward the opening of a new sterile fly dispersal facility in Arizona. The new facility will implement a process known to prevent the spread of NWS. Additionally, Secretary Rollins said "The closure of the Southern ports of entry for the last year has been a tough but necessary action to control the spread of NWS in Mexico and protect the American livestock industry. Thanks to the work across the federal government as well as state, local, and industry partners, it is now safe to reopen the Douglas, Arizona, port in 30 days to resume the hundreds year old movement of cattle."
Still, the timeline remains contingent on continued progress by Mexico and further risk assessments. Meanwhile, the domestic herd size continues to be in tight supply. Levels remain the lowest seen over the past 75 years. Persistent drought conditions and high operational costs remain strong headwinds for expansion.
The USDA's Livestock and Meat International Trade Data from August 5th showed 57,157 head imported from Canada, up from 49,515 one year ago. The USDA releases the import/export data once a month and will be closely followed and the United States/Mexico border begins to reopen.
Technicals
The daily chart for the August live cattle contract (/LEQ26) shows a price rebound following the sell-off that began in mid-June. Since that decline, live cattle has moved back above both the 9-day and 20-day simple moving averages, signaling improved short-term momentum.
From a momentum and volatility standpoint, RSI has continued to trend higher since the end of the sell-off and is currently reading 53.1038. Volatility spiked on July 29, when implied volatility reached 40.33%. Since then, implied volatility has settled at 14.85%.
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