Tuesday Morning Livestock Market Update - Cattle Futures Are Expected to Rebound

GENERAL COMMENTS:

The trading action in cattle shows how vulnerable the market will be if a case of the New World screwworm (NWS) is found in the U.S. A rumor circulated that one was detected, immediately impacting the market. However, that is false as there has been no confirmation of a case. This should cause the market to rebound today as traders may turn into buyers again due to positive fundamentals. Feeder cattle led the charge lower and will lead the charge higher. However, traders may retain a level of caution just to make sure. The cash cattle trade was a bit disappointing, with prices steady for both Southern live and Northern dressed cattle. Boxed beef prices were higher on Monday, with choice up $1.95 and select up $0.14. The Commitment of Traders report showed the fund traders adding 6,622 futures contracts in live cattle last week, bringing their net-long position to 100,338. They reduced their net-long position in feeder cattle by 343 contracts to 17,048.

Hog futures may maintain support, as on Monday, packers were again not aggressive in the negotiated purchase of hogs, with only 530 head reported. This seems to have become the norm since the holiday season at the end of 2025. Perhaps the same will hold as last week -- once a price change is reported, it may be substantially higher. Packers will need to step back into the market more aggressively at some point. Overall, slaughter continues to exceed last year's levels. Pork cutouts on Monday were higher, with a gain of $0.57, and ribs up $3.07. The Commitment of Traders report showed the funds increasing their net-long position by 261 contracts to a total of 78,658.

	BULL SIDE		BEAR SIDE
1)	The rumor of a case of the New World screwworm is false, according to the government's website. This may result in a rebound.	1)	Traders may remain cautious over the possibility of the New World screwworm being found in the U.S at some point and may be reluctant to step back into the market quickly.
2)	Boxed beef prices were higher on Monday as retail demand remains strong. Consumers prefer beef and continue to consume it.	2)	Cattle futures will need to rebound today, or further liquidation may unfold.
3)	Hog futures made new contract highs again on Friday, keeping the uptrend intact.	3)	Hog futures had three days of good gains and may be ripe for a price retracement.
4)	Fund traders are holding and adding to their long positions in hog futures, remaining confident over continued strong demand.	4)	Hog futures will need to see consistent gains in both cash and cutouts, or the futures may run out of steam.