November 6, 2026
Written by Chris Swift
Live Cattle:
In my opinion, cash markets eroded in real time this week, keeping futures traders from attempting even a dead cat bounce. Culminating factors of weaker beef and heavy cattle, met head long with October's optimism of producers. Bullishness was produced solely by producers themselves and it showed in the extent of negative margins some were willing to assume. Psychology has played a large role in the past two weeks' decline. Producers seemingly remained bullish, even with evidence mounting it was becoming more difficult to achieve a higher box price, or more volume. Being an avid follower of the Elliott Wave Theory, that is based primarily on the psychology of the market, led me to believe that greater optimism or pessimism comes at two levels. One is the top or bottom of wave 5, where fundamentals tend to be the staunchest for whichever direction the price is moving, and the wave B. The wave B offers what looks like a "sure thing" for taking out a new high or low. While monitoring social media sites and conversing with producers, the supply issues were dominant in all predictions. I like to look at everything, and when comparing the lower volume of sales and price of box beef, it began to put chinks in the armor. While easy to say in hindsight, and difficult in making a case in foresight, but it seems as if producers stretched the supply issue a little too far when other factors were pushing against. Competing meats have not been a factor in the cattle market, until they were. The plummet of pork prices has led to massive mark downs in grocery stores. With retail beef expected to remain elevated, and pork being put on fire sale, the discrepancy between price may begin to have some consumers learning how to cook pork chops or loin roasts.
Technical indicators turned decisively south this week and very few, if any, support areas are left but the 8/26 low. The current decline is believed the first wave of the C wave down. Wave 2 is expected to produce some type of correction, whether a simple marking of time sideways, or a fierce rally to a resistance level. It's tough to say which one, as again, the fundamentals of cattle were at work in real time this week, not allowing for any stopping point of cash to attempt to rally back to in the futures. If you still haven't put pencil to paper, I recommend you get busy as were the wave 2 to materialize, it may be an opportunity to fix what you didn't like about this decline. Going forward, I expect more cattle to work with. Barring a closing of the Mexican border, more cattle each month will come across. With the beef/dairy cross making head way every year, they could reach a 30% influence on feed in just two more years. I think they are at between 26% and 28%, depending on who you ask. The initial move down is believed the recognition that enough rationing, alternative production of beef/dairy cross, carcass weights, and imports of lean trimmings, have helped to curtail consumer demand. The correction of was still the belief that supply was so short, and the sky is the limit. The next move down is expected to be a wave 3 of C that will be anticipated 1.618 times greater than the wave 1 decline from wherever wave 2 terminates. This will suggest more cattle inventory to work with, along with more expansion, and potentially some decrease in production capacity. Price erosion took place so rapidly, and by so much, I couldn't even come up with what this week's closeouts will be, much less the projected. Both will be expected higher by $50.00 or more.
Other factors outside of the cattle industry materialized this week with a new majority of House and Senate. While the opposing administrative branches may produce a stalemate on some issues, the differences between the two are stark. Like or dislike, but the President has increased government spending, and influenced the equities market in a way that promoted companies' earnings. The newly elected have already made bold statements to divert more government spending into social programs, redistribution of wealth, and increased illegal immigration. Equities sold off sharply from the Wednesday rally, suggesting companies in the future may not have as much government backing or as friendly towards data centers. Some newly elected will become influences in Ag and potentially sit on the Senate Ag committee. If this is the case, water rights, EPA rules, and dislikes of commercial production of agriculture are expected to raise the price to the consumer, but lower the margin to producers. With a 2/3 majority Senate vote needed to remove Trump with an impeachment, or reverse a Presidential veto, the next two years could be very difficult to accomplish anything. Energy ended the week lower, but I remain bullish with no increase of refining capacity or decrease of military actions.
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