Tuesday Morning Livestock Market Update - Cattle May See Further Strength

GENERAL COMMENTS:

Cattle traders were a bit uncertain at the beginning Monday with lower futures early in the day. Over time, more aggressive buying surfaced as it seemed there was more optimism for at least steady cash cattle trade this week. Futures are carrying a discount to cash and steady cash trade could push futures higher. No cattle were traded in the country with feedlots possibly holding the line this week. Strong boxed beef likely provided some support as the morning report showed strong prices which continued through the day. Choice cuts were up $2.42 with select up $1.64. It is too early to tell whether the market has finally found solid support.

Hog futures opened slightly higher Monday and gained early but ran out of steam. Traders were uncertain over cash early in the day due to morning prices not being released due to packer confidentiality. Cash did not perform well as the National Direct Afternoon Hog report was down $2.22 pushing the weighted average price down to $49.66. This certainly dims price outlook for the near term. Thursday is the last trading day for December hogs, which leaves trading in the contract subdued. Cutouts were higher, gaining $0.95. Traders will be cautious Tuesday as they may be uncertain whether to trade cash or cutouts.

	BULL SIDE		BEAR SIDE
1)	If steady cash cattle prices unfold this week, futures will likely push higher.	1)	Cash cattle will need to trade steady to higher this week or futures may fall back to the lows again.
2)	Feedlots may take a stand this week rather than selling quickly at lower bids. Overall cattle numbers remain tight.	2)	Boxed beef values remain in a downtrend as demand for beef has been weaker. This may not change through the end of the year.
3)	A retest of the contract lows in hogs may find strong trader buying interest, even if only for a short period.	3)	Pork demand this year has been lower than both 2022 and 2021 and it does not yet seem this trend may change anytime soon.
4)	Higher cutouts indicate pork demand over the weekend was good and retail shelves need to be restocked.	4)	Hog futures are expected to retest the lows in nearby months due to cash being unable to find solid support.