Friday Morning Livestock Market Update - Cash Cattle Trade Waits to End of Week

GENERAL COMMENTS:

Traders were cautious about the direction of cash Thursday, resulting in some selling pressure. Cash cattle did not trade with business being pushed off until the end of the week. It certainly looks like packers will need to increase bids to purchase cattle as feedlots are determined to receive higher prices or hold them over to next week. Futures already have higher cash factored with the decline of nearby months the result of nervous profit-taking. It seems cattle will trade higher this week but the extent is uncertain. There is renewed concern over demand as boxed beef prices were again lower. Choice cuts were down $0.01 with select cuts down $0.64. Feeder cattle futures closed with gains in most contracts as strong demand for feeder cattle and calves remains. The weakness of corn prices may have had an impact as well.

Hog futures were mixed Thursday as traders assessed the market fundamentals to close out the week. The National Direct Afternoon Hog report showed cash down $1.92. The packers may need to be more aggressive Friday to finish buying for the week. However, any increase will be limited. Pork cutout values declined by $0.22. Weekly export sales increased significantly from the previous week totaling 43,400 metric tons, up 55%. The underlying cash remains choppy but traders continue to support the futures in anticipation of strength as the year progresses.

	BULL SIDE		BEAR SIDE
1)	Cash cattle have not yet traded this week. The feedlots feel the packers will need cattle and want to make them pay more for them.	1)	Cattle futures have higher cash factored in and an increase of not more than $1.00 or $2.00 may be disappointing.
2)	Live cattle futures made new highs before falling back throughout the day. The chart action keeps the uptrend intact. The fund traders continue to support the market.	2)	Packer margins are thin and they may reduce slaughter speeds rather than pay more for cattle in the coming weeks.
3)	Pork export sales were strong, indicating good international demand. Domestic demand is strong as the packers maintain a strong slaughter pace.	3)	Cash hogs and cutouts have been in a range and may stay that way for a while. Supply and demand seem balanced, leaving little reason for this pattern to change.
4)	Hog futures in 2025 closed higher in anticipation of increased demand as time progresses. Hog numbers may be tightening even though weights are higher.	4)	Traders may not be willing to push futures higher due to the uncertainty of cash hog prices.