The clock is ticking toward Friday’s Cattle on Feed report, and live cattle futures are already flexing strength. Placements and inventory data could make or break this rally. Are you positioned for the next big move?
Predictive Market Consultant
Moses
“The Spread King”
📊 Consensus & Historical Trends for December 2025 COF
- Cattle on Feed (as of Dec 1)
- Average (through Nov): ~11.44 million head — down ~1.5% YoY. [u.osu.edu]
- Year-end inventories are expected in the 11.4–11.5M head range.
- Placements (November cattle entering feedlots)
- Year-to-date: ~17.6M total — down 6.4% YoY. [u.osu.edu]
- December placements: consensus likely ~1.64M head, mirroring January’s 1.642 M (–3% YoY). [release.na…s.usda.gov], [brownfieldagnews.com]
- Market Drivers:
- Herd liquidation continues: national cow herd at lowest since the 1950s (~86.7 M head). [u.osu.edu]
- Import ban from Mexico tightening placements. [beefweb.com]
🔍 What This Means Going into Friday
- If inventories on feed ~11.4–11.5M and placements stay near 1.6–1.7M:
- It’s inline with estimates → neutral to slightly bullish, supporting current futures levels.
- If placements fall well below consensus (say <1.60M):
- Indicates tighter near-term supply → bullish across front months.
- If on-feed inventory tops expectations (~11.6M+):
- Suggests build in supply → bearish, especially front-month futures.
🤝 Strategic Scenarios & Trade Outlook
| Scenario | Expected Impact | Trade Angle |
|---|---|---|
| Low placements & normal inventory | Bullish on Feb–Apr futures | Go long jackets or outright longs |
| Normal multiples & low inventories | Slight bullish | Holding current positions |
| High placements/inventory | Bearish near term | Hedge or trim longs, potentially short nearby |
🎯 Tactical Moves for Today/Friday
- Aggressive Bull Stance: Enter long Feb ’26 or Apr ’26 contracts ahead of report, using tight stops near support (~230 Feb).
- Option Strategy: Deploy conservative bull call spreads to manage risk if expecting modest upside.
- Spread Play: Consider Feb ’26 long vs Jun ’26 short, capitalizing on any sustained backwardation if supply-tight conditions are confirmed.
Current Market Tone
- Futures curve is bullish, with gains across all months and strong backwardation (nearby contracts priced much higher than deferred).
- This signals traders expect tight near-term supplies and strong demand.
Historical & Consensus Trends
- On-Feed Inventory: Averaging ~11.44 million head through November, down ~1.5% YoY.
- Placements: Year-to-date down ~6.4% YoY; December likely near 1.64 million head, about 3% below last year.
- Herd Size: U.S. cattle herd at its lowest since the 1950s (~86.7 million head).
- Imports: Mexican cattle imports halted, tightening feeder supply.
Implications for Friday
- If placements come in lower than expected (<1.60M) → bullish for front months (Feb/Apr).
- If on-feed inventory is higher than expected (>11.6M) → bearish, especially nearby contracts.
- Neutral numbers likely keep futures firm but could trigger profit-taking.
Trading Scenarios
| Scenario | Impact | Strategy |
|---|---|---|
| Low placements & normal inventory | Bullish | Long Feb/Apr contracts or bull call spreads |
| Normal placements & low inventory | Slight bullish | Hold longs |
| High placements/inventory | Bearish | Hedge or short nearby |
Action Today
- Bias: Bullish, but cautious ahead of report.
- Best Liquidity: Feb and Apr 2026 contracts.
- Spread Play: Long Feb ’26 vs short Jun ’26 to capture backwardation if tight supply confirmed.
Plains People Trading & Consulting 
Leave a comment