Canada Markets
Variety of Clues Suggest the Worst Should Be Behind Cattle Markets
11/10/2025 | 1:27 PM CST
By Mitch Miller, DTN Contributing Canadian Grains Analyst
To watch 18.6% of the value of your inventory vanish in three weeks is gut wrenching. To try to wrap your head around the purpose and procedure behind it all is just as difficult. But there does appear to be a light at the end of the cattle market tunnel with a variety of technical and fundamental clues all pointing to the same outcome -- a well-deserved recovery in price. Time will tell on the confidence aspect.
As most are already painfully aware, the two quotes that caused the bulk of the damage to the cattle market were President Trump's "we did something" (to get beef prices down) comment on Oct. 16 that started it all. Then Ag Secretary Brooke Rollins' suggestion that President Trump was "very focused" on getting the Mexican border open (despite science not backing it up yet) on Nov. 4.
What ensued was likely more damaging to the cattle industry's confidence in the future than it was to their pocketbooks. And that could be the key to a recovery that challenges record-high prices yet again.
In three short weeks, feeder cattle futures broke 18.6% or $71.10/cwt while live cattle futures fell 12.2% or $30.225/cwt from the Oct. 16 high to the Nov. 6 low. To add insult to injury, choice boxed beef prices actually increased from $366.11 to $378.26 over that same period, according to DTN Livestock Analyst ShayLe Stewart.
Considering lowering the price of beef for the consumer was President Trump's intended goal, the developments were quite unsettling -- not only to the cattle industry but to the president. After the cattle markets closed on Friday, he instructed the Department of Justice to immediately investigate the meat packing companies for "collusion, price fixing, and price manipulation." And with that, the market appears to be optimistic that his attention has shifted away from opening the U.S. border with Mexico and toward the meat packing industry.
In the meantime, it seems to be unanimous that even if increased imports of beef from Argentina do materialize, they will be as insignificant as a rounding error in size compared to the annual consumption of beef in the U.S. And the outcome of last week's meeting between U.S. Ag Secretary Brooke Rollins and Mexican President Claudia Sheinbaum confirmed that, although progress was being made on the new world screwworm issue, there remains no timeline as to when the border would re-open. In short, there is no relief from the tight supply of feeder cattle or beef in general to show for all the damage that was done.
That leads to the positive side of the developments, if you want to call it that. The greatest casualty in all of this is the confidence that it will take to retain these valuable replacement heifers that are necessary in rebuilding of the herd and properly improving the beef supply. Not only at the ranch level, but quite likely at the lending level as well. So not only has there been no meaningful increase in supply, but now the future supply improvement is in question. And thus, the potential for record high prices yet again.
Rounding out the discussion, I would like to address the technical picture as clues there support the fundamental considerations. The most important thing from a timing perspective is the divergence bottom formation seen on the accompanying chart. Even though prices legged down into new reaction lows during the last move lower (on the "very focused" reaction), the RSI or relative strength index did not. That suggests more underlying strength in the market than price alone would imply. The recovery came right from support that had been previous resistance at the $312/cwt area, adding to the strength of the clue. Then the gaps down support the theory that the short-term low should be in place. A breakaway gap was seen following the Oct. 16 comments. Then the remaining largest gap (on the chart) would be considered a midpoint gap. With it being just as the name implies, the expected remaining move would be about equal to that seen up until the midpoint gap. That target would have been about $310/cwt so the turn at $311.40/cwt would have been close enough to be considered achieved.
Bringing it all together, it does suggest the violent bull-market correction should now be complete. The next anxiety the market must deal with is: How to restore confidence necessary to rebuild the herd? That may result in new record highs being set at some point this winter with the gaps lower being initial goals for the bulls to aim for.
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be reached at [email]mitchmiller.dtn@gmail.com[/email]
Follow him on social platform X @mgreymiller
(c) Copyright 2025 DTN, LLC. All rights reserved.
For the following chart...
This feeder cattle daily continuation chart emphasizes just how violent the break was when President Trump decided to try to drive down beef prices. The divergence bottom at support that just so happened to coincide with gap lower targets being filled all reinforce the fundamental theory that the worst should be behind us. (DTN ProphetX chart)?
Variety of Clues Suggest the Worst Should Be Behind Cattle Markets
11/10/2025 | 1:27 PM CST
By Mitch Miller, DTN Contributing Canadian Grains Analyst
To watch 18.6% of the value of your inventory vanish in three weeks is gut wrenching. To try to wrap your head around the purpose and procedure behind it all is just as difficult. But there does appear to be a light at the end of the cattle market tunnel with a variety of technical and fundamental clues all pointing to the same outcome -- a well-deserved recovery in price. Time will tell on the confidence aspect.
As most are already painfully aware, the two quotes that caused the bulk of the damage to the cattle market were President Trump's "we did something" (to get beef prices down) comment on Oct. 16 that started it all. Then Ag Secretary Brooke Rollins' suggestion that President Trump was "very focused" on getting the Mexican border open (despite science not backing it up yet) on Nov. 4.
What ensued was likely more damaging to the cattle industry's confidence in the future than it was to their pocketbooks. And that could be the key to a recovery that challenges record-high prices yet again.
In three short weeks, feeder cattle futures broke 18.6% or $71.10/cwt while live cattle futures fell 12.2% or $30.225/cwt from the Oct. 16 high to the Nov. 6 low. To add insult to injury, choice boxed beef prices actually increased from $366.11 to $378.26 over that same period, according to DTN Livestock Analyst ShayLe Stewart.
Considering lowering the price of beef for the consumer was President Trump's intended goal, the developments were quite unsettling -- not only to the cattle industry but to the president. After the cattle markets closed on Friday, he instructed the Department of Justice to immediately investigate the meat packing companies for "collusion, price fixing, and price manipulation." And with that, the market appears to be optimistic that his attention has shifted away from opening the U.S. border with Mexico and toward the meat packing industry.
In the meantime, it seems to be unanimous that even if increased imports of beef from Argentina do materialize, they will be as insignificant as a rounding error in size compared to the annual consumption of beef in the U.S. And the outcome of last week's meeting between U.S. Ag Secretary Brooke Rollins and Mexican President Claudia Sheinbaum confirmed that, although progress was being made on the new world screwworm issue, there remains no timeline as to when the border would re-open. In short, there is no relief from the tight supply of feeder cattle or beef in general to show for all the damage that was done.
That leads to the positive side of the developments, if you want to call it that. The greatest casualty in all of this is the confidence that it will take to retain these valuable replacement heifers that are necessary in rebuilding of the herd and properly improving the beef supply. Not only at the ranch level, but quite likely at the lending level as well. So not only has there been no meaningful increase in supply, but now the future supply improvement is in question. And thus, the potential for record high prices yet again.
Rounding out the discussion, I would like to address the technical picture as clues there support the fundamental considerations. The most important thing from a timing perspective is the divergence bottom formation seen on the accompanying chart. Even though prices legged down into new reaction lows during the last move lower (on the "very focused" reaction), the RSI or relative strength index did not. That suggests more underlying strength in the market than price alone would imply. The recovery came right from support that had been previous resistance at the $312/cwt area, adding to the strength of the clue. Then the gaps down support the theory that the short-term low should be in place. A breakaway gap was seen following the Oct. 16 comments. Then the remaining largest gap (on the chart) would be considered a midpoint gap. With it being just as the name implies, the expected remaining move would be about equal to that seen up until the midpoint gap. That target would have been about $310/cwt so the turn at $311.40/cwt would have been close enough to be considered achieved.
Bringing it all together, it does suggest the violent bull-market correction should now be complete. The next anxiety the market must deal with is: How to restore confidence necessary to rebuild the herd? That may result in new record highs being set at some point this winter with the gaps lower being initial goals for the bulls to aim for.
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be reached at [email]mitchmiller.dtn@gmail.com[/email]
Follow him on social platform X @mgreymiller
(c) Copyright 2025 DTN, LLC. All rights reserved.
For the following chart...
This feeder cattle daily continuation chart emphasizes just how violent the break was when President Trump decided to try to drive down beef prices. The divergence bottom at support that just so happened to coincide with gap lower targets being filled all reinforce the fundamental theory that the worst should be behind us. (DTN ProphetX chart)?
for a cow
Comment