National Cattlemen July 2026 | Page 19

MARKET UPDATE

By Joseph Vasseur, Analyst CattleFax

As summer comes into full swing, producers involved in feeder cattle markets will be faced with familiar decisions in a market unlike any they have seen before. The current state of the feeder cattle market is one of uncertainty, as a wide range of market moving factors pull prices in different directions. Though market structure is negative and deferred futures contracts are pricing in significant risk, other market factors and a strong seasonal trend continue to support feeder and calf prices. Through the summertime video auction season and into the fall, market dynamics including drought, cattle supplies and New World screwworm( NWS) will influence the seasonality of feeder cattle prices. Regionally, feeder cattle prices and risks will vary this summer. Drought is expected to persist in northern states yet improve in some southern regions. While this is impossible to predict with certainty, it is reasonable to assume these conditions will shape regional supplies and stocking rates in meaningful ways. If drought conditions persist in the North, it could force movement of cattle elsewhere, therefore limiting regional supplies even further beyond the constraints already expected this summer and fall. In the South, however, drought may be removed in some regions as above-average rainfall is typical for El Niño years. While the drought outlook is favorable for this region, NWS could pose a threat to supplies with potential movement restrictions. Amidst

already historically tight supplies, further disruptions provide a favorable outlook that feeder prices will follow their seasonally increasing trend.

As summer video auctions get underway, volumes sold and prices paid will provide valuable insight into the late summer and fall feeder and calf markets. Current feeder cattle prices hovering around $ 360 / cwt suggest the upper end of the range will be $ 370 to $ 380 / cwt through late summer. Prices have softened recently, but support is established at $ 350 to $ 360 / cwt. Feeder cattle will likely develop a trading range as movement is typically slow this time of year and external factors threaten to limit trade volume even more. Calf prices are expected to follow a sideways pattern, with a top-end range forecast of $ 490 to $ 500 / cwt and support near $ 480 / cwt.

Bottom line: Despite negative market structure and a wide array of risks, feeder cattle markets maintain the potential for price increases through this summer and fall. Calves are expected to remain at their current range near $ 500 / cwt. Regional risks such as drought and NWS will be important to monitor as we enter summer video auction season, and producers evaluate when to market cattle. If already tight supplies grow tighter still, producers may be able to squeeze some additional margin out of a volatile feeder market.