Monday Morning Livestock Market Update - Cattle Futures May See Early Pressure

GENERAL COMMENTS:

There was little for traders to get excited over Friday. Cash cattle traded steady for the week and not higher as hoped. USDA reduced the expected average price for steers this year by $1.50 from the April WASDE report to an average of $183.51. Their initial projection for 2025 is for steers to average $188.00. Boxed beef prices declined with Choice down $0.82 and Select down $1.59. Live cattle have developed a sideways trading range. Feeder cattle are in a downtrend as prices in the countryside have been mixed. It seems as if prices have reached a threshold. The Commitments of Traders report showed funds increasing their live cattle long positions by 1,281 contracts to a net long of 40,754 contracts. Funds reduced their long feeder cattle positions by 726 contracts to a net long of 3,903 futures contracts.

Hog futures have had it rough over the past few weeks, but may have found some stability last week. However, cash weakness Friday may leave traders cautious at the beginning of the week. The National Daily Direct Afternoon Hog report showed a decrease of $0.94, bringing the weighted average down to $88.41. The packers are finding sufficient hogs for slaughter without difficulty, even though the slaughter pace is higher. Pork cutouts Friday were higher with a gain of $1.34. USDA reduced the average hog price by $0.50 on the WASDE report to an average of $62.49 this year with an initial estimate of $60.00 for 2025. The Commitments of Traders report showed funds selling 20,845 long positions, bringing their net-long futures positions to 66,038 contracts.

	BULL SIDE		BEAR SIDE
1)	Cash cattle were steady last week, which may improve the outlook for this week, providing feedlots with more confidence.	1)	Feeder cattle futures remain in a downtrend, which may keep live cattle futures from increasing. Demand seems to be slowing as buyers may have reached a threshold.
2)	Funds increased their net-long futures positions as they felt there was little downside price risk.	2)	Boxed beef continues to struggle as demand is not as great as it has been. There is concern over the level of summer demand.
3)	Hog futures seem to be building support with prices moving sideways for much of last week.	3)	Hog futures have not recovered from the losses of the past few weeks. Traders are cautious about buying the break.
4)	The packers may need to be aggressive early this week to procure the hogs required for the increased slaughter pace.	4)	Packers may not be very aggressive Monday as they wait to see the level of weekend pork demand before opening their wallets.