Friday Morning Livestock Market Update - Cash Cattle My See Further Gains

GENERAL COMMENTS:

Live cattle futures have adjusted to the higher cash prices. More cash trade is expected Friday as activity has been somewhat light. Packers may have to bid up to purchase what they need. So far this week, Northern dressed has traded $3.00 higher with Southern live cattle at steady to $2.00 higher. Packers seem short-bought, which could cause them to step up more aggressively Friday. Feedlots are holding tight to higher offers and have been able to receive higher prices. Packers may purchase only what they need, which may leave them short-bought next week. Boxed beef prices were higher with choice of $4.01 and select up $2.37. Weekly export sales were good at 11,000 metric tons (mt) but nothing to write home about.

Hog futures were able to eke out gains in contracts through mid-2025 on Thursday, but June and July could not move above $100. Friday is the last trading day for December hogs with February taking over as the front month. The National Daily Direct Afternoon Hog report showed cash down $2.37 as the packers remained less aggressive due to buying. The packers could be more aggressive Friday if they need to finish up their weekly purchases, but they likely will not be aggressive. Pork cutouts were lower with values down $0.56. This may leave futures struggling as sufficient supply remains available for demand. Weekly export sales were disappointing at 22,500 mt. Saturday slaughter is projected at 154,000 head.

	BULL SIDE		BEAR SIDE
1)	Higher cash cattle trade and the potential for yet higher prices Friday may support futures.	1)	Cattle futures were unable to hold the early gains Thursday with traders taking profits after three days of strong gains. Higher cash is factored in and further profit-taking could take place into the weekend.
2)	Feedlots know packers are short-bought and may hold cattle over if they do not get the prices they want. This would improve the potential for further cash gains next week.	2)	Packers may have paid more for cattle this week to position themselves better for the holiday season. They may not be aggressive the rest of the month.
3)	Hog futures seem to have found support with managed money traders potentially defending their long positions. The recent decline may only be a price correction.	3)	Hog futures have been struggling recently. If underlying cash and cutouts do not show greater support, further pressure could be put on the market.
4)	There is optimism for increased demand and potentially tighter hog supplies moving through 2025.	4)	Packers may not be aggressive Friday as they have already purchased sufficient hogs this week.