Looking to the Futures
Cattle Futures show signs of strength
Beef futures have been no stranger to volatility since coming off their high of 248.3 set back on October 16th when President Donald Trump made comments suggesting he would take steps to lower beef by decreasing tariffs. Doing so raised fears among traders that the domestic beef supply would increase, reducing the need for higher prices.
But at the same time the domestic herd size remains at the lowest point in decades. As the push for lower prices continue, ranchers are running into additional head winds as they look to expand. Increasing input costs remain a large factor as materials such as fencing, equipment, and feed continue to rise. Not to mention the ever-increasing costs of purchasing the land needed to expand operations. When considering all this, and the political uncertainty that comes with the effect of tariffs, it's easy to see why the U.S. cattle herd is having a hard time expanding.
U.S. Secretary of Agriculture Brooke Rollins made it clear the U.S. is not willing to reopen the U.S. border with Mexico to live cattle. The border was closed to cattle imports on May 11th of 2025 after reports of New World Screwworm (NWS) were reported. The border reopened in July, just to close later that month after NWS was detected again. There is still no set time frame as to when the border will reopen.
The USDA does have a plan for expansion. In October the USDA released their plan for the beef industry that included multiple steps to aid ranchers. This included a Grazing Action Plan organized by the USDA and the DOI (Department of the Interior) that is centered to the multiple use missions of both the U.S. Forest Service, and the Bureau of Land Management. The plan is intended to streamline and expand grazing on federal lands, elevate grazing as an Administration priority, and provide direct relief and support to America's ranchers. Together, the agencies administer approximately 240 million acres of rangelands across 28 states, supporting over 23,000 permittees and lessees. There are roughly 29,000 grazing allotments nationwide; about 10% (24 million acres) are currently vacant.
Technicals
Today we have Live Cattle (/LEZ25) on the chart set to a 1-year, 1-day aggregation. We can see the pull back from November 26th, where cattle hit a low of 204.55 and the candle prior to that, which is the 24th, where cattle last traded limit down.
On the simple moving averages, we can see the 200 has just crossed the 20-day. Some may consider this to be a bullish move. However, the 200 is still under the 50-day SMA. The RSI is holding in the middle at 48.5, and Implied Volatility comes in at 15.34%. IV Rank comes in at 44, which has pulled back from the spike on the 24th, where it reached 99.
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Economic Data
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