GENERAL COMMENTS:
Today is Jimmy Carter's National Day of Mourning. The agricultural futures markets will close at 12:15 pm Central time. Keep that in mind as you make decisions regarding risk management and track the markets. Cattle futures fell on Wednesday as traders did not want to wait to see the results of the cash cattle trade, but decided to take some profits. Cash trade is expected to be higher, but if feedlots settle for steady money, further liquidation could be triggered. However, the packers seem short-bought and may need to pay higher prices again this week. Boxed beef continues to improve with choice up $2.82 and select up $1.46. Slaughter data released for the week ending December 21, 2024, showed a three-pound increase in dressed steer weights at 953 pounds, up 3 pounds from the previous week. Dressed heifer weights reached 871 pounds, a new record.
Hog futures continue to struggle with most contracts posting losses. The April contract closed at the lowest level since October 18, 2024. The packers were not aggressive in the cash market with the National Daily Direct Afternoon Hog report down $0.38. It seems the packers have purchased sufficient supply and may not be aggressive the rest of the week. Thankfully, cutouts were able to surge higher posting a gain of $2.13. There needs to be much more support for cutouts to turn the bearish trend. Slaughter continues to hold a strong pace. Saturday slaughter is estimated at 163,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | The trend in cattle futures remains up with the selling pressure on the market on Wednesday likely a price correction from traders banking some profits. | 1) | Cattle traders became nervous at the high prices in an overbought market. There is uncertainty if cash will be higher this week and traders did not want to wait to see. |
| 2) | Consumer demand for beef remains strong with boxed beef prices continuing to increase. Packers must meet that demand and will pay higher prices to obtain the cattle. | 2) | Beef prices may be near a level at which demand may slow. Consumers will not pay the high beef prices indefinitely. |
| 3) | The lower pork prices should stimulate demand in light of the high beef prices. The seasonal weakness seems to have been overdone. | 3) | Hog weights averaged 293.2 pounds last week, up 0.9 pounds from the previous week. This is 0.1 pounds higher than a year ago. |
| 4) | June and later hog contracts seem to be building support and moving in a sideways pattern. | 4) | The packers may be finished buying for the week and will remain less aggressive. Hog supplies remain sufficient for demand leaving packers confident they will have sufficient for slaughter. |
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