Friday Morning Livestock Market Update - Mixed Prices Ahead of the Cattle on Feed Report

GENERAL COMMENTS:

Cattle futures could not find traction on Thursday, with futures closing mixed. Cash cattle did not trade with packers maybe waiting until the Cattle on Feed report is released. The estimates for the report are for on-feed numbers on Jan. 1 at 96.8% with a range of 96.0%-97.6% compared to January 2025. Placements in December are at 93.1% with a range of 88.0%-95.1%. Marketed in December at 101.7 with a range of 100.0%-102.0%. The Make America More Ground Beef (MAMGB), is an initiative designed to help dairy farmers monetize surplus dairy-origin cattle, increase domestic beef supply, and help lower grocery prices for beef. Western United Dairies is promoting this idea. It is not a mandate, but a voluntary program open to all U.S. dairy operations, potentially launching as early as this spring. Western United Dairies shares that the MAMGB program aims to divert 800,000 to 1 million additional dairy-origin cattle in spring 2026, injecting an estimated 900 million to 1.1 billion pounds of lean trim into the ground beef market. They claim it will lower retail ground beef prices by 18% to 25%, but also increase beef demand due to the lower prices. It seems like this would offset each other, leaving the market with prices as they are.

Hog futures continue to find support with contracts making new highs. The July contract closed above $1.09. Cash traded lower with the National Daily Afternoon Hog report down $2.04. Fortunately, pork cutouts gained $0.64, with a value of $94.62. Pork demand seems to be improving, as seen by the stronger cutouts. Packers have not been as aggressive, resulting in improved margins. Traders may take some profits ahead of the weekend but will retain most of their long positions.

	BULL SIDE		BEAR SIDE
1)	Cattle placements are expected to be significantly lower than a year ago, indicating tight supplies will continue.	1)	Cattle futures are having a difficult time breaking through resistance to the upside.
2)	Cattle marketings in December are expected to be above those of a year earlier. Consumer demand remains strong.	2)	Packers may not be aggressive in the cash market again this week. This would keep a lid on the price.
3)	Hog futures continue to make new highs, providing increased confidence for traders to hold long positions.	3)	Hog futures are overbought and may correct into the weekend. Traders may be cautious in case unexpected news surfaces.
4)	Pork cutouts have been increasing, indicating improved consumer demand.	4)	Packers likely have sufficient hogs purchased and may not be aggressive today, resulting in lower cash prices.