Friday Morning Livestock Market Update - Traders to Position Ahead of the Report Today

GENERAL COMMENTS:

Cash cattle traded lower than anticipated Thursday. Southern live cattle traded $4.00 lower with Northern dressed cattle trading $5.00 lower. It has not paid off to hold out for the past three weeks. Feedlots are willing to sell before prices decline further. The current market is feeding on itself as cattle are sold to avoid further weakness. The Cattle on Feed report will be released after Friday's close with traders expecting higher placements than a year ago. The average estimate for the Cattle on Feed report is for on-feed numbers at 99.3% of a year ago with a range of 98.7% to 100.0%. Placements are expected at 103.0% with a wide range of 98.6% to 106.1%. Marketings are estimated at 102.2%, ranging from 101.6% to 102.5%. Boxed beef prices were lower on Thursday with choice down $1.26 and select down $0.58.

Hog futures had a second day of liquidation Thursday as stops were hit. Traders have not liked the weakness of cutouts as it may reflect weaker demand. Cutouts were down Thursday, posting a loss of $1.49. The National Daily Direct Hog report showed cash down $2.54. Packers have been reducing slaughter this week, attempting to support cutout prices and improve margins. Futures may bounce Friday as the past few times the market had sold off quickly the weakness only lasted two days. Short-covering may take place ahead of the weekend.

	BULL SIDE		BEAR SIDE
1)	Cattle futures may have factored in the lower cash and a potentially negative Cattle on Feed report. Traders may cover short positions ahead of the report and the weekend.	1)	Lower cash cattle trade and the weakness of boxed beef may keep the downtrend intact.
2)	Feeder cattle may be developing a sideways trading pattern, providing traders the confidence to buy back into the market.	2)	If weekly beef export sales are low on the report Friday, it may keep further pressure on the market as international demand might be slowing.
3)	Hog futures have finished two days of liquidation. If the recent pattern holds, the market should bounce Friday.	3)	Hog futures closed near the lows Thursday and could result in follow-through selling at least to begin Friday. .
4)	Pork cutouts have shown a substantial decline this week. The lower prices should stimulate demand.	4)	Packers have been reducing slaughter to improve margins and be less aggressive with purchases. This could back up hogs in the country.

Thursday Closing Livestock Market Update - Pressure Continues to Whittle on Contracts

GENERAL COMMENTS:

It was a dreadful day for the livestock complex as the contracts continued to bleed lower as the market continues to lack the necessary technical support to put a bottom in the market's current move. Some cash cattle trade did develop -- but prices were marked $4.00 to $5.00 lower than last week's weighted average. March corn is up 1/2 cent per bushel and March soybean meal is up $1.30. The Dow Jones Industrial Average is down 450.94 points.

LIVE CATTLE:

The only good thing that developed throughout Thursday's trade is that although the futures complex traded lower -- thank God prices remained above the market's 100-day moving average. April live cattle closed $0.97 lower at $193.80, June live cattle closed $0.95 lower at $189.97, and August live cattle closed $0.77 lower at $188.40. The market's 100-day moving average is well within a day's worth of trade, so monitoring that threshold remains imperative, as a close below it would be extremely bearish. Some light trade was reported in the cash cattle market throughout the day as Southern live cattle traded for $199, which is $4.00 lower than last week's weighted average, and Northern dressed cattle traded for $315, which is $5.00 lower than last week's weighted average. 

Thursday's is estimated at 117,000 head -- steady with a week ago and 7,000 head less than a year ago.

Boxed beef prices closed lower: choice down $1.26 ($312.63) and select down $0.58 ($303.18) with a movement of 101 loads (62.54 loads of choice, 21.45 loads of select, 5.74 loads of trim and 11.10 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady with the week. At this point, any more trade that develops likely remains steady with the week's trend.

FEEDER CATTLE:

The feeder cattle complex endured a painful day as the market again dipped below its 40-day moving average without receiving the necessary technical support it needed. March feeders closed $2.20 lower at $266.82, April feeders closed $2.22 lower at $266.37 and May feeders closed $1.97 lower at $265.07. Not helping matters is Friday's monthly Cattle on Feed report that is expected to show placements will be higher than a year ago, which causes the market some anxiousness. But that's one of the problems with the COF reports because it makes logical sense that placements should be greater than a year ago, given that just this past month Mexican cattle imports were allowed to resume to the U.S. after a two-month hiatus. At La Junta Livestock Commission in La Junta, Colorado, compared to last week, feeder steers weighing 500 pounds or less sold sharply higher, while steers weighing 500 pounds or more traded mostly $2.00 to $4.00 higher. Feeder heifers sold $1.00 to $4.00 higher across all weighted groups. The CME feeder cattle index 2/19/2025: not available at this time.

LEAN HOGS:

It was another painful day of significant losses for the lean hog complex as not only did the futures market close lower -- but so did cash prices and pork cutout values. The market is desperately hoping that Friday's export report shares the news of strong sales to countries abroad because the domestic demand pulse in the U.S. isn't helping the market right now. But once again today, it was the belly that significantly caused the carcass price's decline as it alone fell $7.46. April lean hogs closed $1.22 lower at $88.52, June lean hogs closed $1.37 lower at $100.30 and July lean hogs closed $1.15 lower at $101.45.

Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.54 with a weighted average price of $89.44 on 1,386 head. Pork cutouts totaled 323.95 loads, with 297.33 loads of pork cuts and 26.62 loads of trim. Pork cutout values: down $1.49, $94.03. Thursday's slaughter is estimated at 473,000 head -- 13,000 head less than a week ago and 15,000 head less than a year ago. The CME lean hog index 2/18/2025: up $0.79, $90.98.

FRIDAY'S HOG CALL: Lower. Friday's cash hog market likely sees less interest as packers have likely secured their needs for the week.

Thursday Midday Livestock Market Update - Prices Dip Lower

GENERAL COMMENTS:

It's been a disappointing day thus far for the livestock complex as all three of the livestock markets are trading lower, as technical support simply isn't available right now. Still, no cash cattle trade has developed, but packer demand should improve at any time. March corn is up 1 cent per bushel and March soybean meal is up $0.90. The Dow Jones Industrial Average is down 547.89 points.

LIVE CATTLE:

The market has decided to add yet another down leg to the charts as the live cattle complex continues to dive lower. The morning's regression is modest, but it feels gut wrenching given the mass position lost since the end of January. April live cattle are down $1.37 at $193.40, June live cattle are down $1.25 at $189.67 and August live cattle are down $1.02 at $188.15. If the market happens to dip below it' 100-day moving average, more downward pressure is likely, as that's a bearish signal. A few bids are currently on the table at $198 live in Texas, and $200 live and $315 dressed in Iowa. Still no cattle have sold today, but packer interest could improve at any time now. Asking prices are firm in the South at $202 to $205, but are still not established in the North.

Boxed beef prices are mixed: choice down $1.80 ($312.09) and select up $0.25 ($304.01) with a movement of 63 loads (38.29 loads of choice, 16.39 loads of select, 5.50 loads of trim and 3.27 loads of ground beef).

FEEDER CATTLE:

The positive move above the market's 40-day moving average in the spot March contract earlier this week is no longer a reality, as the contracts are trading $1.00 to $2.00 lower in Thursday's noon hour. Upon seeing the live cattle complex trade lower yet again, technical uncertainty starts to again take root in the feeder cattle complex. But I think it's important to remember that although feeder cattle prices have softened slightly compared to recent weeks (partly because of the decline in the futures complex, and partly because of weather challenges), the CME feeder cattle index is still extremely high, as it closed at $278.51 Wednesday afternoon. This continues to prove that demand is still strong despite the futures market's weakness.

LEAN HOGS:

The lean hog complex is enduring another painstaking day of continued loss, as pork cutout values and traders are currently finding one thing in common -- lower prices. April lean hogs are down $1.17 at $88.57, June lean hogs are down $1.12 at $100.55 and July lean hogs are down $0.97 at $101.62. Again today, the carcass price is being pulled lower, mainly by the belly's $9.16 drop, which is problematic for traders as they desperately yearn to see consistent consumer demand.

The projected lean hog index for 2/19/2025 is up $0.24 at $91.22, and the actual index for 2/18/2025 is up $0.79 at $90.98. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.32 with a weighted average price of $89.45, ranging from $88.00 to $90.00 on 686 head and a five-day rolling average of $91.25. Pork cutouts total 200.09 loads with 184.75 loads of pork cuts and 15.34 loads of trim. Pork cutout values: down $1.28, $94.24.

Thursday Morning Livestock Market Update - Hog Futures May Show Further Liquidation

GENERAL COMMENTS:

Traders may be cautious the rest of the week as cash is expected to trade lower and the Cattle on Feed report will be released after the close on Friday. Traders may be trying to defend their long positions or taking some profits on short positions to prepare for cash info and the report. The average estimate for the Cattle on Feed report is for on-feed numbers at 99.3% of a year ago. Placements are expected at 103.0%. Marketings are estimated at 102.2%. As usual, there is a wide range for placements ranging from 98.6% to 106.1%. Boxed beef prices were less than stellar on Wednesday with choice down $1.88 and select up $0.05. Packers continue to reduce slaughter and remain less aggressive with purchases. This may have feedlots moving more cattle at lower prices rather than holding for yet again lower prices. Feeder cattle futures failed to follow through on Tuesday's strength, leaving the potential for further weakness.

Hogs were hit hard Wednesday due to sharply lower cutouts Tuesday and weakness again on Wednesday. It is unusual to see pork cutouts drop substantially for two consecutive days. The futures are following the pattern set since the end of last year in which a strong price increase is met with a sharp retracement. Pork cutouts fell $3.95, setting a bearish tone for Thursday. Bellies posted a decline of $16.75, dragging the complex lower. The National Daily Direct Afternoon Hog report showed a gain of $0.19, but that may be the last gain for the week. The sharp decline of futures will be difficult to overcome anytime soon.

	BULL SIDE		BEAR SIDE
1)	Cattle futures may have been overcorrected to the downside ahead of the Cattle on Feed report. The market may rebound somewhat once the report is released.	1)	The cattle market is having difficulty finding support. The inability to bounce higher may trigger increased selling.
2)	Lower boxed beef prices may again stimulate demand. Lower cattle supplies will be around for a while.	2)	The weakness of boxed beef indicates demand has slowed and lower prices may be needed to stimulate demand.
3)	Hog futures may be following the pattern seen since December. A sharp decline will be met with renewed buying interest as strong pork demand should continue.	3)	Weekly hog weights are 1.6 pounds higher than a year ago at an average weight of 289.6 pounds.
4)	Weekly hog weights declined by 0.4 pounds from the previous week. Declining weights may tighten supply.	4)	April hog futures gapped lower and closed the chart gap remaining from Feb. 5. Follow-through selling is expected due to the weakness of cutouts