Friday Morning Livestock Market Update - Cash Cattle Expected to Remain Higher

GENERAL COMMENTS:

Traders did not like the weekly export sales report Thursday and liquidated some positions on the idea that current prices are too high, curtailing international demand. Weekly export sales were a paltry 100 metric tons (mt), down 97% from the previous week and the 4-week average. Domestic demand has been holding well but high food prices may also impact demand. Boxed beef prices were lower Thursday with choice down $0.49 and select down $0.60. Cash cattle did not trade during the trading period but did late in the day with Northern dressed cattle $2.00 higher. Southern cattle have yet to trade but likely will trade higher as well. This should provide a boost to the market as futures would adjust higher to remain in line with cash. Feeder cattle futures look as if they may see a further price correction if live cattle are unable to provide needed support.

Hog futures held Thursday after the significant decline Wednesday. Futures tried to regain the losses but could not hold the early highs. Packers were less aggressive, as had been anticipated, but traders found support from good weekly export sales. Pork exports for this year totaled 35,200 mt with sales for 2025 totaling 26,600 mt. These combined sales were the highest for the year at 61,800 mt. Mexico has been a large pork buyer with 60,000 mtMT on the books for delivery this year and so far for next year. This is 15,000 mt more than the same time last year. Pork prices have increased substantially since August but remain at reasonable prices. The National Daily Direct Afternoon Hog report showed cash down $2.28 with cutouts also showing weakness with a decline of $0.96.

	BULL SIDE		BEAR SIDE
1)	Northern dressed cattle traded for $2.00 higher late Thursday, which may support the market Friday as futures may adjust higher.	1)	Feeder cattle futures look technically weak and may see further selling as stop orders could be triggered, resulting in further liquidation.
2)	The feedlots are holding for higher prices and Southern live cattle are likely to trade higher as well.	2)	Low beef exports may pressure cattle prices as international buyers may be turning away due to high prices.
3)	Strong pork export sales indicated prices are not curtailing international demand. This demand is expected to continue.	3)	Both cash hog and pork cutout weakness Thursday may put some pressure on the market Friday as traders may turn cautious and take some profits.
4)	The hog slaughter pace continues to remain strong, keeping hog supplies current. Weights are higher than a year ago but have not impacted overall packer demand.	4)	Managed money traders hold a record-long futures position and may take profits ahead of the end of the year.