Live Cattle futures spreads: Bullish

  • The December-February closed October at $2.00
    • as compared to the end of September settlement at (-$2.40)
    • and the previous 5-year high weekly close for the last week of October at (-$0.725)
    • Indicating demand is expected to outpace available supplies through the end of 2025
  • The February-April closed October at $0.95
    • as compared to the end of September settlement at (-$0.975)
    • and the previous 5-year high weekly close for the last week of October at (-$0.80)
    • Also indicating demand is expected to stay strong in relation to supply through early 2026
  • The April-June closed at $7.325
    • as compared to the end of September settlement at $6.60
    • and the previous 5-year high weekly close for the last week of October at $7.70
    • Again indicating a long-term bullish commercial outlook
  • Bottom Line: Despite what the US president says, market reads on real supply and demand continue to grow more bullish longer-term.

Feeder Cattle futures spreads: Bullish

  • The November-January closed October at $6.975
    • as compared to the end of September settlement at $6.30
    • and the previous 5-year high weekly close for the last week of October at $3.275
  • The January-March closed October at $6.30
    • as compared to the end of September settlement at $4.775
    • and the previous 5-year high weekly close for the last week of October at $0.875
  • Bottom Line: As sale barns go quiet over the winter, supplies are expected to tighten in relation to demand. It’s interesting to note the Jan-March spread was unchanged for the month at the end of October.

Lean Hogs futures spreads: Neutral-to-Bullish

  • The December-February closed October at (-$1.25)
    • as compared to the end of September settlement at (-$1.575)
    • and the previous 5-year high weekly close for the last week of October at $0.10
      • with the previous 5-year average weekly close for the last week of October at (-$2.75)
    • The short-term commercial outlook is neutral-to-bullish
  • The February-April closed October at (-$3.70)
    • as compared to the end of September settlement at (-$2.55)
    • and the previous 5-year average weekly close for the last week of October at (-$4.375)
      • with the previous 5-year high weekly close for the last week of October at (-$2.85)
  • The April-June closed October at (-$11.625)
    • as compared to the end of September settlement at (-$9.70)
    • and the previous 5-year average weekly close for the last week of October at (-$11.90)
  • Bottom Line: It was an interesting month for Lean Hog spreads, with commercial pressure seen in deferred spreads indicating increased supplies in relation to demand.