Friday Morning Livestock Market Update - Cash Cattle Could Go Either Way

GENERAL COMMENTS:

Live cattle futures regained the losses of Wednesday and then someone Thursday as contracts were pulled up by the strength in feeder cattle. Feeder cattle futures have been leading the complex and are within striking distance of retesting the highs. Cattle futures may have some headwinds Friday and lower cash trade and lower boxed beef prices on Thursday may increase trader caution ahead of the weekend. Limited cash trade took place on Thursday in the North at $2.00 lower than last week. That may set the stage for weakness in the South on Friday as business is done. The weakness of boxed beef does not indicate that beef demand is improving. Choice cuts were down $1.72 and select cuts were down $1.11. Weekly export sales were not as good as hoped with sales down 15% from last week. The inability of boxed beef to increase may limit cash potential.

Hogs plummeted with nearby contracts showing the greatest pressure. There was no specific fundamental reason for the pressure, leaving much of the selling technical. Futures moved below support, likely triggering stops, which increased the selling and triggered more stops. The National Direct Afternoon report showed cash down $0.37 but not enough to turn the market bearish. Pork cutouts increased $4.30, supported by bellies jumping $26.64. Weekly export sales were good at 32,200 metric tons (mt), up 26% from the previous week. But none of this supported the market Thursday. June hogs closed at the lowest level since Nov. 15, 2024, with July falling to the lowest level since Jan. 8. Saturday slaughter is estimated at 99,000 head.

	BULL SIDE		BEAR SIDE
1)	The strength of feeder cattle is providing the support for live cattle. Feeder cattle are in demand and continue to trade at higher prices.	1)	Light cash trade in the north took place at $2.00 lower than last week. That may set the stage for the rest of trading this week.
2)	Feedlots may hold for at least steady prices, and if they do not receive them, they may hold cattle over until next week.	2)	Boxed beef prices have been slipping the past few days, indicating demand may not be improving as much as expected.
3)	Hog futures were under technical selling pressure. Traders may buy back their recent short positions ahead of the weekend.	3)	Hog futures broke below support and may see follow-through selling to begin the day. Prices might test the next level of support.
4)	Hog slaughter remains strong, keeping pork moving to the market. Hog supplies are current with weights declining.	4)	The packers may have most of the needs purchased for the week, resulting in lower cash Friday.